The Federal Reserve surprised markets Tuesday, slashing interest rates amid concern about the potential economic toll of the coronavirus outbreak. Following a near to-the-point retest at 1.11, reinforced closely by February’s opening level at 1.1094, H4 price gained traction, eventually grasping the underside of 1.12.
Talks of Fed easing, coupled with record lows in US Treasury yields, witnessed the euro firmly advance Monday, adding more than 120 points into the close. EUR/USD weekly price recently touched gloves with channel resistance, extended from the high 1.1569.
EUR/USD bulls went on the offensive last week, adding more than 170 points into the close. The chart directed focus to the recent break of resistance at 1.0873, the 2016 yearly opening level, after bottoming off channel support, taken from the low 1.1109.
Increased selling in US Treasury yields weighed on the US dollar index Thursday, with the 10-year benchmark shaking hands with all-time lows at 1.23%. Optimistic data out of the US – durable goods and pending home sales – failed to offer much respite, with the DXY testing lows at 98.36 and marginally fading daily support priced in at 98.45.
Wednesday had the EUR/USD unchanged at the close of trade in London. A fleeting move north of the 1.09 handle emerged, yet 1.0908 proved challenging to overcome, sending the pair to H4 support at 1.0857. Note 1.09 links with a 38.2% Fibonacci retracement ratio.
