- Sell-off in Treasury yields offset the German yields slide amid risk-aversion.
- Downside remains compelling ahead of German/ US inflation data.
The EUR/USD pair extends its side trend near 1.1130 region in early trades, unperturbed by the intensifying risk-off moods amid the US-led protectionism and the resulting global growth worries.
A part of the pair’s resilience can be attributed to the sell-off in the US Treasury yields across the curve, with the benchmark 10-year yields sitting near 20-month lows of 2.170%. The weakness in the Treasury yields drags the US dollar off the two-week tops v. its main peers.
However, the bulls remain cautious and keep the upside attempts restricted, in the wake of the slide in the German 10-year bond yields to near record lows of -0.205% reached July, 6th 2016. Moreover, a sharp drop in the German retail sales also continues to weigh on the shared currency. Germany retail sales drop -2.0% m/m in April vs. +0.1% expected.
The immediate focus now remains on the German preliminary CPI figures that are expected to come in softer. Hence, the upside bias in the spot remains limited ahead of the German Prelim CPI, US Core PCE Price Index and UoM Consumer Sentiment data.
EUR/USD Technical Levels
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