EUR/USD - Uptrend on hold amid rising T-yields

EUR/USD rally stalls in 1.2160-1.2320 range.
Upside capped by fears Draghi would tame ECB hawks.
USD fails to catch a bid despite rising T-yields.
Fears of US government shutdown.

Omkar Godbole FXStreet Contributor

The latest leg higher in the EUR/USD (from Jan. 9 low of 1.1915) seems to have run out of steam as the bulls struggle this week to take out 1.23 levels in a convincing manner.

The spot clocked a three-year high of 1.2323 on Wednesday, before falling back to 1.2165 levels. As of writing, the pair is trading at 1.2245 levels.

Draghi likely to tame hawks at ECB

The upside is being capped reportedly due to fears that ECB's Draghi would convey a dovish message next week. Also, the recent ECB rhetoric was directed at the pace of EUR's ascent, forcing investors to question whether they have run ahead of themselves.

US 10-year yield clocks 13-month high

The US treasury bond yields, which are normally highly correlated with Dollar, have decoupled and risen without the US Dollar. However, the USD may find bids as the 10-year yield rose today above 2.63 percent; its highest level December 2014.

Focus on US government funding bill

The US House of Representatives passed a bill to fund government operations through Feb. 16. Now it heads to the Senate, where it faces an uncertain future. The resulting uncertainty could overshadow rising Treasury yields and keep USD bulls at bay.

EUR/USD Technical Levels

FXStreet Chief Analyst Valeria Bednarik writes, " An acceleration upward through 1.2280 should lean the scale towards the upside and favor a re-test of the 1.2322 high, while beyond this last, the rally can continue up to 1.2350. Below 1.2200, lower lows are likely, but bulls are still willing to add on dips."

Support levels: 1.2200 1.2165 1.2130

Resistance levels: 1.2280 1.2320 1.2350

Author

Omkar Godbole

FXStreet Contributor

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

EUR/USD onsolidates around mid-1.1800s as traders keenly await FOMC Minutes

The EUR/USD pair struggles to capitalize on the previous day's goodish rebound from the 1.1800 neighborhood, or a one-and-a-half-week low, and consolidates in a narrow band during the Asian session on Wednesday. Spot prices currently trade just below mid-1.1800s, nearly unchanged for the day.

GBP/USD seems vulnerable near mid-1.3500s; UK CPI/FOMC Minutes awaited

The GBP/USD pair struggles to capitalize on the previous day's late rebound from an over one-week low – levels below the 1.3500 psychological mark – and trades with a negative bias for the third consecutive day on Wednesday. The downside, however, remains cushioned as investors seem reluctant to place aggressive directional bets ahead of the release of the latest UK consumer inflation figures and FOMC Minutes.

Gold bounces back toward $4,900, looks to FOMC Minutes

Gold is attempting a bounce from the $4,850 level, having touched a one-week low on Tuesday. Signs of progress in US–Iran talks dented demand for the traditional safe-haven bullion, weighing on Gold in early trades. However, rising bets for more Fed rate cuts keep the US Dollar bulls on the defensive and act as a tailwind for the non-yielding yellow metal. Traders now seem reluctant ahead of the FOMC Minutes, which would offer cues about the Fed's rate-cut path and provide some meaningful impetus.

Top Crypto Gainers: Jito drops, Morpho holds steady, Convex Finance climbs

Decentralized Finance tokens, including Jito, Morpho, and Convex Finance, rank among the top-performing crypto assets over the last 24 hours. Jito dips on Wednesday after rallying 22% the previous day on the launch of a new mainnet node.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.

Ripple slides to $1.45 as downside risks surge

Ripple edges lower at the time of writing on Tuesday, from the daily open of $1.48, as headwinds persist across the crypto market. A short-term support is emerging at $1.45, but a buildup of bearish positions could further weaken the derivatives market and prolong the correction.