EUR/USD: Off two-month highs as US yields recover, focus on risk sentiment


  • EUR/USD pulls back from eight-week highs as US yields bounce from record lows. 
  • The US index futures are pointing to risk reset. 
  • Risk-on will likely weigh over the EUR, a safe-haven currency. 

EUR/USD has pulled back from two-month highs, possibly tracking the recovery in the US treasury yields.

The pair is currently trading at 1.1160, having hit high of 1.1214 on Tuesday. That was the highest level since Jan. 2.

Meanwhile, the 10-year US treasury note is trading at 0.986%, representing a seven basis point gain from the record low of 0.916% reached Tuesday. The two-year yield has also recovered to 0.683% from 0.613%. 

Yields had tanked during Tuesday'sNorth American trading hours, sending the US dollar lower across the board in response to the decision by the US Federal Reserve (Fed) to cut rates by 50 basis points.

The emergency rate cut delivered to contain the negative impact of coronavirus on the economy initially had a positive impact on equities. The sentiment, however, turned bearish and the US markets ended the day in the red as investors took the rate cut as a sign of panic. 

Focus on equities

Markets have treated the EUR as a haven currency throughout the recent bout of coronavirus-led risk aversion. This is evident from EUR/USD's near 90-degree surge
from 1.0788 to 1.12 seen in the last eight trading days. 

So, if the risk sentiment improves, the bid tone around the single currency will likely weaken, allowing a notable pullback in EUR/USD. At press time, futures on the S&P 500 are reporting a 1.2% gain. 
 
On the data front, German and Eurozone retail sales and final German and Eurozone PMI readings will be eyed by traders. Across the pond, the US ISM non-manufacturing (Feb) will take the center stage. 

Technical levels

EUR/USD

Overview
Today last price 1.1163
Today Daily Change -0.0017
Today Daily Change % -0.15
Today daily open 1.118
 
Trends
Daily SMA20 1.0918
Daily SMA50 1.1033
Daily SMA100 1.1059
Daily SMA200 1.1099
 
Levels
Previous Daily High 1.1214
Previous Daily Low 1.1095
Previous Weekly High 1.1053
Previous Weekly Low 1.0805
Previous Monthly High 1.1089
Previous Monthly Low 1.0778
Daily Fibonacci 38.2% 1.1168
Daily Fibonacci 61.8% 1.1141
Daily Pivot Point S1 1.1113
Daily Pivot Point S2 1.1045
Daily Pivot Point S3 1.0994
Daily Pivot Point R1 1.1231
Daily Pivot Point R2 1.1282
Daily Pivot Point R3 1.1349

 


 

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