EUR/USD down to 1.1710 as European morning trade gets underway
The dollar is a touch higher so far on the day and while the move is relatively light, EUR/USD is testing the lows for the year of 1.1704-11 currently.
Higher Treasury yields and a push higher in USD/JPY are among the catalysts keeping the dollar buoyed at the moment, with the focus leaning more towards the Fed able to stick with taper expectations before year-end amid “substantial further progress”.
As for EUR/USD, this is a critical point for the pair as a break below the 30-31 March lows @ 1.1704-11 leaves little in the way of a drop towards 1.1600 next.
While the market is still brushing aside delta variant concerns in the US, things aren’t quite the same in Europe as growth expectations look to have already peaked and there are fears of a worsening virus situation going into autumn and winter this year.
In any case, the technical picture is a key element to watch at the moment and I would expect there to be a run of stops below the support region outlined above if it gives way. That could see a quick and sharp fall in price, triggering a broader dollar bid.