EUR/USD tracks firmer Treasury yields around 1.1750, German data eyed

EUR/USD grinds higher around 1.1745 following the heaviest daily jump in six weeks during early Friday.

The major currency pair cheered downbeat US dollar performance, amid upbeat sentiment, the previous day. However, a lack of major data/events confines the quote’s latest moves.

That said, China’s Evergrande is up for the scheduled coupon payment and the latest restructuring also needs justification, which in turn pokes the market’s optimism. Also, pre-data cautious mood and a rethink over the Fed’s hawkish play tame the EUR/USD by the press time.

Even so, the Fed’s rate hike and tapering signals, coupled with Chinese help to Evergrande and progress over the US $3.5 trillion stimulus, keep the pair buyers hopeful.

Amid these plays, the US 10-year Treasury yields refresh 11-week top to 1.43%, following the heaviest daily jump since February. Further, the S&P 500 Futures rise 0.15% intraday during the three-day rebound at the latest.

While German IFO data for September will be the immediate catalyst for the EUR/USD prices, US New Home Sales for August, expected 0.7M versus 0.708M prior, will direct the quote afterward. A slew of Federal Reserve (Fed) speakers, including Chairman Jerome Powell, are slated for speeches during Friday, likely making the dull active going forward. Above all, risk catalysts are the key to follow while expecting a calmer end to the volatile week. 

Technical analysis

Although oversold RSI triggered a heavy rebound of the EUR/USD prices from the lowest levels since August 20, the bulls need validation from a three-week-old downward sloping trend line and 50-DMA, around 1.1790. Also challenging the run-up are the bearish MACD signals and recently steady RSI. Hence, the quote is likely to ease towards short-term horizontal support near 1.1700.