The dollar loses some ground as risk sentiment shows signs of recovery
EUR/USD climbs to a high of 1.1224 as price now tests the 100-hour MA (red line) @ 1.1222. Buyers will be looking to break above that level in order to capture near-term control as the dollar is holding weaker on the session, alongside the yen.
This comes as we’re seeing a bit of a turnaround in US equity futures with E-minis climbing to positive territory now, paring earlier losses:
Despite the optimism seen there, I’d be a little bit wary though as Treasury yields haven’t really offered the same kind of positive vibes with 10-year yields still down by 1.1 bps at 2.36% currently.
But looking at the chart for EUR/USD, it’s a battle now between buyers and sellers as the former looks to extend a break higher by recapturing near-term control while the latter looks to defend the key near-term resistance level.
Further resistance is seen around 1.1250 and then at 1.1265 from the highs over the past two weeks of trading.
The dollar may be slightly on the back foot on the session but the decline is still rather modest for the time being. I would expect the US cash equity market to be the real decider in trading today so we’ll have to wait and see how the battle between greed and fear plays out. For now, it looks like greed is starting to trump over fear but just barely.