- The US dollar reverses sharply amid rising US yields, the DXY turns decisively higher.
- EUR / USD spreads losses, look at the 20-day SMA.
The EUR/USD It reversed sharply amid a rally in the US dollar and fell from a three-day high to a week-long low in a few minutes. The pair peaked at 1.1899 after the start of the US session and was driven by US data, and at time of writing, it is trading at 1.1833, the lowest level in a week.
Clarida + ISM services sector compensates ADP report
A weaker than expected reading of the ADP private employment report weakened the dollar across the board, sending EUR / USD toward 1.1900. When the pair was ready for another bullish breakout, two events favored the dollar: the ISM services sector and Clarida’s comments.
The ISM services sector beat expectations in July, reaching 64.1 (consensus: 60.4). At the same time, Fed Vice Chairman Clarida said the economy could justify interest rate hikes by early 2023. His comments sparked a sell-off of Treasuries and pushed yields higher.
The 10-year US yield rose from monthly lows of 1.12% to 1.21%. The DXY is now up 0.25% on Wednesday, having the best day in weeks.