The Euro surged yesterday after the broad-based US Dollar sell-off triggered by the US Federal Reserve’s dovish forward guidance on interest rates. The Fed’s decision also resulted losses in treasury yields, the 2-year treasury yield fell to 1.711%, the lowest level since Nov. 20 2017, and the 10-year treasury yield fell below 2%, first time since 2016. However, the single currency bulls are not in the clear yet, as the market already priced-in for a Fed rate cut in July. Also, keeping in mind ECB’s further rate cut policy, could weigh on the Euro.
The Euro soared yesterday as the bulls took out the 200-day moving average and currently attempting to break above the 50-day moving average. If the buyers succeed, we will likely see further gains towards 1.13 and possibly retesting the recent highs 1.1340s. However, if the bears are able to defend the 50-day moving average, then price could retrace and retrace 1.1220.
Support: 1.1265 / 1.1220
Resistance: 1.13 / 1.1340