EUR/USD: Probing key hurdle on broad-based USD weakness

• Broad-based USD weakness pushed EUR/USD higher to the confluence of symmetrical triangle hurdle and 55-day moving average (MA).
• The key hurdle would be breached if the US-German (DE) yield differentials continue to slide.
• A bull breakout, if confirmed, could be followed by a sustained move above 1.15.

The EUR/USD pair could cross the key technical resistance 1.1435 in Europe, having rallied 0.4 percent in Asia.

Friday’s non-farm payrolls release and a below-forecast China import and export growth figure released over the weekend likely bolstered the fears of a global growth slowdown and prospects of Fed rate pause in 2019. As a result, Asian desks offered the greenback across the board.

Notably, the dollar sell-off is likely to continue in Europe, as the dovish turn in Fed expectations could push the 10-year US-German yield differentials to new multi-month lows. As of now, the 10-year yield spread stands at 259 basis points –   a level last seen on Sept. 28.

So, the critical resistance at 1.1435 –   a level which marks the confluence of the 55-day MA and the trendline connecting the Nov. 11 and Nov. 20 high (upper edge of the symmetrical triangle) – could be scaled in Europe.

A daily close above 1.1435 would confirm a triangle breakout and allow a sustained move above 1.15. The bull breakout, however, may remain elusive if the treasury yields turn higher.

EUR/USD Technical Levels