EUR/USD technical analysis: Rises to 200-hour MA as US yields sink

EUR/USD has jumped to the 200-hour MA hurdle in Asia.
With US yields sinking, the pair may take out the MA resistance.

Omkar Godbole FXStreet Contributor

The weakness in the US treasury yields and the resulting broad-based US Dollar sell-off is boding well for EUR/USD.

As of writing, the pair is trading at 1.1260, representing 0.33% gains on the day, having tested the 200-hour moving average (MA) hurdle of 1.1266 soon before press time.

The US Federal Reserve stood pat on Wednesday but signaled possible rate cuts of as much as half a percentage point over the next six months.

As a result, the US treasury yields are fast long ground. The 10-year yield has dropped below 2 percent for the first time since November 2016 and the 30-year yield has printed lows below 2.5% for the first time October 2016.

The slide in the treasury yields and rising odds of Fed rate cuts in September and December could continue to weigh over the US Dollar during the day ahead. The EUR/USD pair could break above the 200-hour MA and challenge the psychological hurdle of 1.13.

That said, the outlook as per the daily chart would turn bullish only after the pair finds acceptance above the recent high of 1.1348.

Hourly chart

Trend: intraday bullish

Technical levels

1. R3 1.1326
2. R2 1.129
3. R1 1.1258
PP 1.1222
1. S1 1.119
2. S2 1.1154
3. S3 1.1122

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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