EUR/USD may suffer another frustrating setback at 1.2150 as US yields bite

FXStreet Team FXStreet

EUR/USD has advanced amid optimism about stimulus and vaccines. The pair is set to break the 1.2150 double-top but rising US yields may push the dollar back up, Yohay Elam, an Analyst at FXStreet, reports.

Key quotes

“Europe's coronavirus situation has been improving with another day of fewer cases in Germany and also a pickup in the old continent's vaccination campaign. After several snags, deliveries of doses from Pfizer/BioNTech, Moderna and AstraZeneca have resumed and are pushing immunization higher.”

“President Joe Biden is set to advance a bill worth as much as $1.9 trillion. Both the White House and the Federal Reserve brushed aside concerns of overheating and inflation. However, markets have begun factoring in elevated growth – and price pressure – prospects. Yields on US Treasuries have hit a new 11-month high above 1.23%. The increase in returns previously pushed the dollar higher with it.”

“So far, investors have been abandoning the dollar in a ‘risk-on’ mood, but that may change. Lael Brainard, Governor at the Federal Reserve, speaks later in the day and may shed light on what the bank thinks about higher inflation prospects.”

“Critical resistance awaits at 1.2150, which has capped EUR/USD on Tuesday and also last week – a double-top. Further above, 1.2190 and 1.2225 are eyed.”

“Some support is at the daily low of 1.2125, followed by 1.2080, a swing low from last week. A more significant cushion is at 1.2055.”

Author

FXStreet Team

FXStreet

EUR/USD onsolidates around mid-1.1800s as traders keenly await FOMC Minutes

The EUR/USD pair struggles to capitalize on the previous day's goodish rebound from the 1.1800 neighborhood, or a one-and-a-half-week low, and consolidates in a narrow band during the Asian session on Wednesday. Spot prices currently trade just below mid-1.1800s, nearly unchanged for the day.

GBP/USD seems vulnerable near mid-1.3500s; UK CPI/FOMC Minutes awaited

The GBP/USD pair struggles to capitalize on the previous day's late rebound from an over one-week low – levels below the 1.3500 psychological mark – and trades with a negative bias for the third consecutive day on Wednesday. The downside, however, remains cushioned as investors seem reluctant to place aggressive directional bets ahead of the release of the latest UK consumer inflation figures and FOMC Minutes.

Gold bounces back toward $4,900, looks to FOMC Minutes

Gold is attempting a bounce from the $4,850 level, having touched a one-week low on Tuesday. Signs of progress in US–Iran talks dented demand for the traditional safe-haven bullion, weighing on Gold in early trades. However, rising bets for more Fed rate cuts keep the US Dollar bulls on the defensive and act as a tailwind for the non-yielding yellow metal. Traders now seem reluctant ahead of the FOMC Minutes, which would offer cues about the Fed's rate-cut path and provide some meaningful impetus.

Top Crypto Gainers: Jito drops, Morpho holds steady, Convex Finance climbs

Decentralized Finance tokens, including Jito, Morpho, and Convex Finance, rank among the top-performing crypto assets over the last 24 hours. Jito dips on Wednesday after rallying 22% the previous day on the launch of a new mainnet node.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.

Ripple slides to $1.45 as downside risks surge

Ripple edges lower at the time of writing on Tuesday, from the daily open of $1.48, as headwinds persist across the crypto market. A short-term support is emerging at $1.45, but a buildup of bearish positions could further weaken the derivatives market and prolong the correction.