EUR/USD Price Falls Below 1.10 Amid Risk, High Rewards and Eye Data
- EUR/USD is under pressure for a second straight day, moving away from its recent daily low.
- US Dollar strength is supported by risk aversion and higher yields ahead of a long day.
- Markit EU/US March PMIs are released in February ahead of US durable goods orders.
- As new Russian sanctions and Moscow-Beijing ties emerge, Biden’s trip to Brussels will be a key NATO event.
Early Thursday, EUR/USD price hit an intraday low near 1.0980, continuing yesterday’s losses in negative sentiment. Due to rising US Treasury yields and risk aversion, the major currency pair has weakened recently.
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Rising yields and Fed hawkish
On Wednesday, the 10-year US Treasury yield fell less than 1.5 basis points (bps) after falling from a three-year high. US Treasury yields are rising, favoring bulls in the US Dollar Index (DXY), which is expected to hit the 99.00 level in the near term.
The Fed’s hawkish stance contributed to the recent bond crash by pushing yields higher and favoring dollar buyers. St. Louis Fed President James Bullard and Cleveland Fed President Loretta Mester recently endorsed the idea of a Fed rate hike and quantitative tightening (QT) in may.
Meanwhile, the UK and US are ready to send more aid to Ukraine, even though Russia has released a list of diplomats flagged as “persona non grata” at the US Embassy. States, affecting market sentiment and driving up US dollar prices. In recent days, U.S. Senator John Cornyn announced he met with Treasury Secretary Janet Yellen to discuss Russian gold sanctions, signaling risk aversion was present before President Biden met with NATO allies. NATO in Europe.
The Russian president is ready to insist on ruble payments for oil to “unfriendly” countries and fears that a possible coronavirus outbreak in China and Europe could also challenge sentiment.
EUR/USD Price Analysis via Daily Open Interest
EUR/USD price closed in the red yesterday, while daily open interest showed no significant change. Therefore, there is no clear trend according to open interest.
What’s next for EUR/USD price analysis?
EUR/USD price will likely continue to be pressured by the wave of risk aversion, but the movement in yields will determine the direction of EUR/USD rates. Markit’s manufacturing PMI is expected to fall to 56.3 from 57.3 in previous reports, while the services PMI is expected to fall to 56.0 from 56.5 in March. US durable goods orders are also expected to decline in February, with a previous forecast of -0.5% vs. 1.6%.
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EUR/USD Price Technical Analysis: The Bears to Break the Double Bottom
The EUR/USD price formed a double bottom in the area of 1.0965. The pair is slowly moving towards the level, and if it manages to break the double bottom, we will see a strong sell-off towards the 1.0900 area, which is another key support area ahead of 1.0805 (multiple low). month).
The volume data shows a bearish bias as the down bars have steadily increasing volume. Additionally, we can see a no supply bar around the 20 period SMA, another sign of rejection.
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