- EUR/USD trades near the 200-hour SMA at 1.1963 vs 1.1991 in Asia.
- Deutsche Bank and Goldman Sachs raise their forecast for the US 10-year yield.
- The dollar’s uptrend likely to continue as the US spends more to lift growth.
EUR/USD has pulled back to key support, pausing a three-day winning streak, with prominent analysts raising their year-end target for the US 10-year yield.
The pair has retreated to the 200-hour Simple Moving Average (SMA) at 1.1963, having nearly tested resistance at 1.1991 in Asia. That level marks the 38.2% Fibonacci retracement of the drop from the Feb. 25 high of 1.2243 to the March 9 low of 1.1836.
The US 10-year yield is looking to extend Thursday’s sharp rebound from 1.47% to 1.55% and possibly helping the dollar gain ground against the EUR and other major currencies.
Analysts at Deutsche Bank now see the 10-year yield rising to 2.25% by the end of 2021. That’s a full percentage point hike in the year-end forecast. Earlier this week, Goldman Sachs revised its forecast for the 10-year yield higher to 1.90%.
Meanwhile, UBS foresees a continued strength in the US dollar, given the US is outspending other nations on measures to boost economic growth and is likely to have a higher growth trajectory.
And lastly, the Eurozone’s slow vaccine delivery and coronavirus lockdowns could keep the EUR bulls at bay – more so, as the European Central Bank said Thursday it’s willing to accelerate money printing to keep bond yields under check. Meanwhile, Federal Reserve’s officials have so far refrained from making any such commitment and called rising yields a sign of economic optimism.
Data-wise, the focus today will be on the German Consumer Price Index for February, Eurozone’s Industrial Production, the US Producer Price Index, and the US Michigan Consumer Sentiment Index.
Technical levels
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