- EUR/USD jumped as high as 1.0933 but then lost steam.
- The dollar continues to be supported by rising Treasury bond yields.
EUR/USD rallied as high as 1.0933 during the European session, but then lost steam and pulled back towards the 1.0900 area. Some dollar weakness had buoyed the pair, but greenback downsides remain short-lived as Treasury yields continue to rise.
The 10-year and 30-year Treasury bond rates hit new highs at 2.786% and 2.781% on Monday, before retreating slightly. Expectations of an aggressive tightening by the Federal Reserve remains a key factor.
The economic calendar in the US today is light, and the focus will be on the Fed officials who will speak in public. Raphael Bostic, Michelle Bownman and Christopher Waller will participate in the “Fed Listens” meeting in the American morning. Then Charles Evans (Chicago Fed) will speak at the Economic Club of Chicago and in the afternoon John Williams will moderate an event at the Economic Club of New York.
In Europe, the French elections gave support to the euro. No candidate won by majority, so there will be a second round between Macro and Le Pen, on April 27. In case the polls continue to show a parity between the candidates or a possible victory for Le Pen, negative pressures for the common currency could be expected. The key event of the week for the euro will be the European Central Bank meeting on Thursday.
Stopped below 1.0940
The EUR/USD parried gains below the key barrier of 1.0940, that has been containing the increases since last Wednesday. If it breaks above, the Euro would be positioned for more gains, with the next resistance at 1.0960 and 1.0990.
In the opposite direction, relevant support can be seen at 1.0890 followed by 1.0873, the daily low, and then 1.0850.
Technical levels
Source: Fx Street
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