EUR / USD still on track to post small daily gains, holding above 1.1900

• EUR / USD is trading in a tight range at the beginning of the week.
• The modest rise in US Treasury yields limits the rise of the EUR / USD.
• Retail sales in the euro area increased more than expected in February.

After holding below 1.1900 during the trading hours of the Asian session, the EUR / USD pair gained traction during the European session, but struggled to rise in the second half of the day. At time of writing, the pair was up 0.15% on the day at 1.1914.

Upbeat data supports the EUR on Monday

Hours earlier, data released by Eurostat revealed that February retail sales rose 3% after January’s 5.2% contraction. This reading beat the market expectation of 1.5% and helped the shared currency to remain resilient against its rivals.

On the other hand, the US dollar index (DXY) appears to have freed itself from the downward pressure and US Treasury yields posted modest gains on Monday. In the last auction, the US sold 38 billion dollars in 10-year bonds with a high yield of 1.68%. Currently, the 10-year benchmark US Treasury yield is up 0.76% to 1.678% and the DXY is mostly flat on the day at 92.13.

On Tuesday, the ZEW economic sentiment index for the euro area and Germany will be considered for a new boost. Later in the day, the US Bureau of Labor Statistics will release the Consumer Price Index (CPI) figures for March. The core CPI, which excludes volatile food and energy prices, is expected to rise to 1.6% annually from 1.3% in February. A stronger than expected figure could help the USD gain strength and make it difficult for the EUR / USD to maintain its bullish momentum.

Technical levels