EUR/USD jumps to 4-week highs near 1.0200

• Renewed buying interest pushes EUR/USD closer to 1.0200.
• The German 10-year bond yield is trading on the defensive below 1.70%.
• De Guindos, vice president of the ECB, declined to comment on how far rates might go.

The European currency continues with Friday’s gains and pushes the EUR/USD to new all-time highs at 1.0198 earlier in the week, just below the 1.0200 area.

EUR/USD rises on dollar weakness

EUR/USD advances for the second session in a row and flirts with the 1.0200 neighborhood in response to the intense dollar sell-off, forcing the Dollar Index (DXY) to break below 108.00 support and post new multi-week lows .

Further gains in the pair seem to have picked up extra pace following the ECB’s unprecedented 75 basis point interest rate hike at its September 8 event, while Monday’s market talk of the The likelihood that interest rates in the region could move into restrictive territory also gave the single currency wings.

The pair’s strong rebound, however, contrasts with the correction in German 10-year Bund yields, which are above the 1.70% mark after touching 1.80% late last week.

Still around the ECB, Vice President Luis De Guindos said he doesn’t know how high rates could go, while stressing that the recent 75 basis point rise is expected to anchor inflation expectations.

On the domestic agenda, short- and medium-term bond auctions in the United States are expected.

EUR/USD Levels

For now, the pair is up 1.16% at 1.0160 and is now facing the initial barrier of 1.0198 (12 Sep weekly high), followed by 1.0202 (17 Aug high) and then 1.0338 (100-day SMA) .

On the other hand, the break of 0.9863 (2022 low recorded on Sep 6) would target 0.9859 (Dec 2002 low) on the way to 0.9685 (Oct 2002 low).