EUR/USD - Selling stalls, focus on German yields
The relentless selling in the EUR/USD pair appears to have come to a halt in Asia. Thus, a chart driven upside move is gathering steam.
The current pair was last seen trading around 1.0568 levels; up 0.10% on the day.
Focus on German yields
The European Central Bank has said that the common currency area faces political risk ahead. As per the ECB, Trump victory poses risk to Eurozone as well.
However, the odds of the ECB expanding its QE program in December have dropped somewhat on concerns of bond market liquidity.
Consequently, the bond yields might recover, thus lending a helping hand to the oversold EUR. However, the ‘Trump Bump’ and the resulting spike in the treasury yields is showing no signs of exhaustion. Hence, the action in the treasury yields too could influence the pair.
EUR/USD Technical Levels
A break above 5-DMA level of 1.0584 would open doors for 1.0628 (10-DMA), which if breached could yield a rally to 1.0658 (Nov 22 high). On the other hand, a breakdown of support 1.0538 (Asian session low) would expose 1.05 (zero figure), under which the losses could be extended to 1.0463 (March 2015 low).
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
