EUR/USD runs into 50% Fib hurdle as US-German yield differential slips to 4.5-year low


  • EUR/USD tested a key Fib hurdle above 1.1060 in Asia. 
  • The dollar is on the defensive, courtest of risk-on and weak labor market data. 
  • Declining yield differential favors further gains in EUR/USD. 

EUR/USD is looking to prolong its recent buoyant mood amid a relentless decline in the US-German bond yield spread.

The currency pair is currently trading near 1.1040, representing a marginal gain on the day, having nearly tested 1.1066 a few minutes before press time. That level marks the 50% Fibonacci retracement of the sell-off from 1.1495 to 1.0636.

EUR/USD jumped 1.36% on Thursday, as markets offered dollars, tracking the risk-on action in the equity markets, which was reportedly triggered by the US Senate's approval of the unprecedented $2 trillion fiscal stimulus package.

The American dollar also took a beating on concerns related to the US job market. The US initial jobless claims topped 3.2 million last week, the official data released Thursday showed. The actual figure was double the 1.5 million forecast and four times greater than the prior high set in October 1982.

Thursday's gain was the pair's four-consecutive daily rise. The winning trend looks set to continue with the US-German yield differential hovering at multi-year lows. The spread between the two-year US and German bond yields declined to 0.934  basis points on Thursday. However, if equities turn red, the USD may draw haven bids, yielding a pullback in EUR/USD.

Technical levels

EUR/USD

Overview
Today last price 1.1042
Today Daily Change 0.0011
Today Daily Change % 0.10
Today daily open 1.1031
 
Trends
Daily SMA20 1.1061
Daily SMA50 1.0999
Daily SMA100 1.1048
Daily SMA200 1.1083
 
Levels
Previous Daily High 1.1059
Previous Daily Low 1.087
Previous Weekly High 1.1237
Previous Weekly Low 1.0638
Previous Monthly High 1.1089
Previous Monthly Low 1.0778
Daily Fibonacci 38.2% 1.0987
Daily Fibonacci 61.8% 1.0942
Daily Pivot Point S1 1.0915
Daily Pivot Point S2 1.0798
Daily Pivot Point S3 1.0726
Daily Pivot Point R1 1.1103
Daily Pivot Point R2 1.1175
Daily Pivot Point R3 1.1291

 

 

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