- EUR/USD remains on track to close second straight day higher.
- US Dollar Index turned south in the early American session.
- 10-year US T-bond yield is losing more than 2% on Tuesday.
The EUR/USD pair closed the first day of the week in the positive territory and stayed relatively quiet around 1.1800 during the first half of the day on Tuesday. With the greenback coming under strong bearish pressure during the American trading hours, however, the pair gained traction and touched its highest level in two weeks at 1.1861. As of writing, EUR/USD was up 0.4% on a daily basis at 1.1859.
After spending a large portion of the day in the green, the US Dollar Index (DXY) turned south and touched its lowest level since March 24 at 92.37.
In the absence of significant macroeconomic data releases, the US Treasury bond yields continued to impact the USD’s performance against its rivals. The benchmark 10-year US Treasury bond yield is currently losing 2.6% on the day at 1.661% and the DXY is down 0.15% at 92.43.
The data from the EU showed that Sentix Investor Confidence improved sharply to 13.1 in April from 5 in March and beat the market expectation of 7.5 by a wide margin, helping the shared currency stay resilient against its peers.
On Wednesday, the IHS Markit will release the Services PMI data for the euro area and Germany. Later in the day, the FOMC will release the minutes of its March meeting.
EUR/USD near-term outlook
UOB Group analysts think that EUR/USD is likely to have a difficult time climbing above 1.1870.
“The current movement is viewed as the early stages of a corrective rebound. In view of the nascent build-up in momentum, any EUR strength is likely limited to 1.1870 for now,” analysts noted. “Overall, EUR is expected to trade with a positive bias as long as it does not move below 1.1745 within these few days.”
Technical levels to consider
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