EUR/USD: New lows in sight as US bond yields rise

EUR/USD has turned lower as US yields resume their gains. Bears target 1.18 as bond auction may trigger fresh dollar strength, Yohay Elam, an Analyst at FXStreet, reports.

See –  EUR/USD: Euro weakness/dollar strength is a win-win for both economies – BBH

Key quotes

“Consumer Price Index figures for February are set to show a pick up in inflation, especially in headline prices fueled by rising oil prices. While Core CPI has likely remained in check last month, any tick to the upside may carry the greenback higher.”

“The more significant event in America’s auction of new ten-year Treasuries. If investors seize on the new issuance of debt, yields could slip toward 1.50% and allow EUR/USD to resume its recovery. However, there are greater chances that the ten-year auction follows the recent seven-year one – resulting in weak demand, higher returns, and a consequent surge in the dollar.”

“Support awaits at the daily low of 1.1868, followed by the 2021 trough of 1.1836. A weak cushion awaits at 1.1815, with stronger support at 1.18 – a psychologically significant level, followed by 1.1750. All were in play in late 2020.”  

“Some resistance is at the daily high of 1.1902, followed by 1.1915, Tuesday’s high point. It is followed by 1.1950 and 1.1990.”