- US dollar gains momentum as US yields soar.
- EUR/USD extends weekly losses after breaking 1.0950 support area.
- A test of 1.0900 (March 14 low) seems likely.
The EUR/USD It broke below 1.0950 and fell to 1.0920, reaching the lowest level since March 14. The pair remains under pressure amid a stronger US dollar overall.
Treasury bonds fall, the dollar gains
Stock prices are mixed on Tuesday amid no improvement towards peace in Ukraine and after US economic data. The European Union proposes new sanctions on Russia. As for the data, the ISM Services sector index rose in March to 58.3 from 56.5.
Fed Vice Chair Lael Brainard said on Tuesday that the central bank is prepared to take stronger action if the inflation outlook and indicators of inflation expectations suggest the need for such action. New York Fed President John Williams will comment in a few minutes.
Treasuries are falling, with the 10-year Treasury yield rising 6.80% to 2.56%, the highest level since mid-2019. Higher yields buoyed the dollar during the US session. DXY is up 0.35%, trading at 99.35 and could post the highest daily close in nearly two years.
Short term outlook
The break of 1.0950 left EUR/USD vulnerable to further losses. The next strong support area could be seen around 1.0900 (14 Mar low), followed by 1.0880. The euro is likely to remain under pressure as long as it is below 1.0950. A recovery above this level would ease the negative tone, with the next resistance at 1.0980.
Technical levels
Source: Fx Street
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