“¢ A modest USD uptick prompts some fresh selling at higher levels.
“¢ Weaker US bond yields might cap USD gains and limit the downside.
The EUR/USD pair failed to capitalize on the early uptick to multi-day tops and slipped below the 1.1200 handle, fresh session lows in the last hour.
The pair built on the overnight goodish bounce from the bearish gap opening and gained some follow-through traction on Tuesday. The up-move to 1.1218 area seemed unaffected by the disappointing release of German Factory Orders, which expanded 0.6% m/m – less than expected during March.
The uptick, however, turned out to be short-lived, rather met with some fresh supply amid a modest pickup in the US Dollar demand. After spending the majority of the early part of Tuesday’s trading session in the negative territory, the USD caught some bids and was seen as one of the key factors behind the intraday slide.
Meanwhile, the latest leg of a downfall of around 25-pips lacked any obvious fundamental catalyst. Adding to this, the ongoing slide in the US Treasury bond yields might keep a lid on any runaway USD rally and should help limit any substantial weakness amid absent relevant market moving economic releases.
Hence, it would be prudent to wait for a strong follow-through selling before traders start positioning for the resumption of the pair’s prior/well-established bearish trend and a possible slide back towards challenging YTD lows support, closer to the 1.1100 round figure mark.
Technical levels to watch
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