EUR/USD below 1.2300 handle, remains under pressure

The EUR/USD is weakening as the US dollar bulls are relentless across the board.
US Treasuries yields are spiking for the third consecutive day.
The 30-pip rebound at 1.2250 mainly attributed to profit-taking.

Flavio Tosti Independent Analyst

The EUR/USD is trading at around 1.2275 down 0.58% on Friday’s trading as the European forex session is slowly coming to an end.

The spot just saw profit taking in the 1.2250 region with a 30-pip rebound but the momentum remains tilted to the downside.

One side finally capitulated in what was a tug of war in the last 3 days where the single currency traded in a tight range between the 1.2350 and 1.2400 level. It was a crowded trade to the upside and the bears finally took the lead and broke through the 1.2350 support in Friday’s European session.

The euro negative sentiment is exacerbated by recent disappointing data on Wednesday with lower inflation in the Eurozone and speculation of a dovish ECB next week.

Meanwhile, the greenback is on a tear, the US Dollar Index (DXY) spiked almost 0.60% on Friday, jumping from the 89.90 level to 90.40, smashing through the 90.00 mark with strong momentum.

Underpinning the greenback strength are bond yields which continue their advance for the third consecutive day and are reaching multi-week highs. The US 10-year Treasury yield is spiking above March 21 high and currently at 2.94%.

Meanwhile, safe-haven gold is down in the 1,3350 region while US stocks are also taking a breather from their recent advance and are currently down on the day as investors are buying the greenback.

EUR/USD 4-hour chart

The current momentum is bearish. Resistance is seen at 1.2300 swing low and 1.2400 swing high while support is seen at 1.2260 demand level, followed by 1.2215 cyclical low.

Author

Flavio Tosti

Independent Analyst

Japanese Yen weakens to two-year lows, targets 162.00

USD/JPY extends its advance well north of the 161.00 barrier on Thursday, always on the back of the continuation of the US Dollar's post-Fed rebound and despite warnings from the BoJ of a potential intervention at any time. Next on the upside for spot comes the July 2024 peak in levels just shy of 162.00 the figure.

AUD/USD trims gains, challenges 0.7000

AUD/USD now alternates gains with losses just above the key 0.7000 level ahead of the opening bell in Asia. The pair clinches its third consecutive daily retracement, always on the back of the persistent move higher in the Greenback, particularly following the Fed’s hawkish hold on Wednesday.

Gold drops to daily lows near $4,200

Gold struggles to attract buyers on Thursday, trading closer to the $4,200 mark per troy ounce. The yellow metal adds to Wednesday’s pullback and slips back to multi-day lows in response to the stronger US Dollar following the Fed’s hawkish hold on Wednesday.

XRP vulnerable below key EMA resistance levels

Ripple (XRP) ticks down below $1.20 with short-term support at $1.16 intact at the time of writing on Thursday. An early-week rally was rejected at $1.28, weighing on sentiment as traders broadly de-risked.

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.

The next big AI trade may not be about chips or software

Artificial intelligence has already created some of the biggest winners in modern market history. Chipmakers have surged, data centre construction is booming, and electricity demand forecasts are changing globally.