- EUR/USD trades in a narrow band at the start of the week.
- Modest increase in US Treasury bond yields limits EUR/USD’s upside.
- Retail Sales in the euro area rose more than expected in February.
After staying below 1.1900 during the Asian trading hours, the EUR/USD pair gained traction during the European session but struggled to push higher in the second half of the day. As of writing, the pair was up 0.15% on a daily basis at 1.1914.
Upbeat data supports EUR on Monday
Earlier in the day, the data published by Eurostat revealed Retail Sales in February increased by 3% following January’s contraction of 5.2%. This reading beat the market expectation of 1.5% and helped the shared currency stay resilient against its rivals.
On the other hand, the US Dollar Index (DXY) seems to have shaken off the bearish pressure with US Treasury bond yields posting modest gains on Monday. At the latest auction, the US sold $38 billion worth of 10-year notes at a high yield of 1.68%. Currently, the benchmark 10-year US T-bond yield is up 0.76% at 1.678% and the DXY is virtually flat on the day at 92.13.
On Tuesday, the ZEW Economic Sentiment Index for the euro area and Germany will be looked upon for fresh impetus. Later in the day, the US Bureau of Labor Statistics will release the Consumer Price Index (CPI) figures for March. The Core CPI, which excludes volatile food and energy prices, is expected to rise to 1.6% on a yearly basis from 1.3% in February. A stronger-than-expected print could help the USD gather strength and make it difficult for EUR/USD to preserve its bullish momentum.
Technical levels to watch for
Share
