EUR/USD jumps above 1.06 as the Treasury yields drop

The EUR/USD pair jumped to a session high of 1.0624 this Thursday morning on the back of a drop in the treasury yields. 

The 10-year treasury yield dropped two basis points to 2.48% after having failed to extend gains above 2.5% in the North American session. 

Moreover, Yellen’s disappointing comments on the economy and the sharp downward revision of the US Q1 GDP by the Atlanta Fed overshadowed the rise in the core inflation and core retail sales and triggered a wave of selling in the US dollar. EUR/USD staged a solid recovery from the low of 1.0521 to end the day higher at 1.0598.  

ECB minutes due for release later today could offer insights into central bank’s view of the rising inflation across the Eurozone. Later in the day, weekly US initial jobless claims number and monthly housing starts and building permits could influence the dollar side of the story. 

Increase in demand for the 30-year Treasury Inflation Protected Securities (TIPS) at the auction later today could strengthen the bid tone around the US dollar. 

EUR/USD Technical Levels

The pair was last seen trading around 1.0615. A break above 1.0633 (Feb 14 high) would open doors for 1.0658 (Jan 26 low) and 1.0706 (38.2% of Trump sell-off). On the downside, breach of support at 1.0589 (session low) could yield a revisit to 1.0567 (23.6% fib), under which a major support is seen at 1.0521 (previous day’s low).