EUR/USD turns positive on slightly softer treasury yields

The bid tone around the USD weakened on softer treasury yields, thus opening doors for a positive move in the EUR/USD pair.

At the time of writing, the pair was trading 0.10% higher on the day around 1.0690. The spot clocked a low of 1.0668.

Treasury yields don’t buy Harker’s hawkish take

Fed’s Harker said earlier this week that March should be considered for the next rate hike. His hawkish take coupled with the prospects of Trump administration altering Dodd-Frank act led to a broad based USD rally.

However, the Treasury yields are not buying Harker’s hawkish take. The 10-yr yield dropped from 2.46% to 2.36% earlier this week and remains under pressure around 2.38%. At the short-end of the curve, the 2-yr yield is down close to one basis point. Meanwhile, the 30-yr yield is down 1.2 basis points.

The data docket is thin, hence the focus remains on the US-German 2-year yield spread and the political noise in Europe.

EUR/USD Technical Levels

Breach of resistance at 1.0707 (38.2% of Trump sell-off + rising trend line drawn from Jan 11 low - Jan 30 low) would expose 10-DMA at 1.0730, above which the spot could target 1.0788 (100-DMA). On the downside, breach of the previous day’s low of 1.0656 could yield a sell-off to 1.0608 (50-DMA) and 1.0589 (Jan 19 low).