- The US dollar remains under pressure as US yields decline and stock prices rise.
- EUR / USD returns above 1.2150 maintaining recent gains.
The EUR/USD it reached 1.2178, a new two-month high, and then fell back to find support above 1.2150. It is hovering around 1.2160, clinging to recent significant gains.
A weaker US dollar remains the key support for EUR / USD. The DXY is down 0.16%, trading slightly above 90.00. The 10-year yield is trading around 1.57% after touching Monday’s levels above 1.60% momentarily. Wall Street stocks are mixed. The Dow Jones gains 0.78% while the Nasdaq falls 1.20%.
The mixed tone around risk sentiment helped limit the EUR / USD rally. A break above 1.2170 would target the 1.2190 area that protects 1.2200. On the downside, immediate support is at 1.2150 followed by 1.2135 (daily low).
The euro rose modestly against the US dollar on Monday, 150 pips higher than its level a week ago. The short-term trend points to the upside. “Now that the EURUSD has broken through, we think it may struggle to reach a new trading range without new catalysts. We also note that the spot has been realigned with real rate spreads since the end of last year, as currency markets focus more on expected spreads in growth potential, ”TD Securities explained in its monthly report.
Technical levels
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