• Concerns over Italy's debt situation keep a lid on any the early uptick to 1.1225 area.
• A modest bounce in the US bond yields underpin the USD and add to the selling bias.
The EUR/USD pair struggled to capitalize on its early uptick and momentarily slipped below the 1.1200 handle in the last hour to refresh session lows.
The optimism over US car tariff delay turned out to be short-lived and the pair failed to build on the overnight goodish bounce, rather now seemed to be facing some stiff resistance near the 1.1225 region amid concerns over Italy's debt situation.
It is worth reporting that Italy's Deputy Prime Minister Matteo Salvini had said that the government is ready to break the EU's ceiling of 3% debt-to-GDP ratio, which triggered a sharp decline in Italian bond yields and have been affecting negatively on the common currency.
As Yohay Elam, FXStreet's own Analyst explains: “The common currency is also suffering from its issues. Italian interior minister Matteo Salvini, which is the de-facto PM, refused to raise the VAT, a measure agreed with the European Commission.”
He further added, “investors are selling off Italian bonds and running to the safety of German ones. The spread between the yields has reached its highest in three months, and the negative German 10-year yield is also wreaking havoc on the euro.”
Meanwhile, a sudden change in the risk sentiment helped the US Treasury bond yields to witness a sharp intraday bounce, which eventually provided a minor lift to the US Dollar and further collaborated to the pair's latest leg of the slide over the past few hours.
Moving ahead, Thursday US economic docket features some second-tier releases - housing market data, the usual initial weekly jobless claims and Philly Fed Manufacturing Index, which might be looked upon to grab some short-term trading opportunities.
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD regains traction, recovers above 1.0700
EUR/USD regained its traction and turned positive on the day above 1.0700 in the American session. The US Dollar struggles to preserve its strength after the data from the US showed that the economy grew at a softer pace than expected in Q1.
GBP/USD returns to 1.2500 area in volatile session
GBP/USD reversed its direction and recovered to 1.2500 after falling to the 1.2450 area earlier in the day. Although markets remain risk-averse, the US Dollar struggles to find demand following the disappointing GDP data.
Gold holds around $2,330 after dismal US data
Gold fell below $2,320 in the early American session as US yields shot higher after the data showed a significant increase in the US GDP price deflator in Q1. With safe-haven flows dominating the markets, however, XAU/USD reversed its direction and rose above $2,340.
XRP extends its decline, crypto experts comment on Ripple stablecoin and benefits for XRP Ledger
Ripple extends decline to $0.52 on Thursday, wipes out weekly gains. Crypto expert asks Ripple CTO how the stablecoin will benefit the XRP Ledger and native token XRP.
After the US close, it’s the Tokyo CPI
After the US close, it’s the Tokyo CPI, a reliable indicator of the national number and then the BoJ policy announcement. Tokyo CPI ex food and energy in Japan was a rise to 2.90% in March from 2.50%.