EUR/USD hits two weeks highs above 1.0600
27.06.2022, 17:03

EUR/USD hits two weeks highs above 1.0600

  • Euro gains as European yields move higher.
  • US dollar weakens as markets avoid a correction after last week’s rally.
  • EUR/USD rises back above the 20-day SMA.  

The EUR/USD rose further during the American session and climbed to 1.0614, reaching the highest level in two weeks. The euro was unable to consolidate above 1.0600 and pulled back underneath the psychological level, still holding onto holding daily gains.

The improvement in risk sentiment weakened the greenback. The DXY is falling 0.25% on Monday, trading at 103.85. US bond yields are modestly higher, but European yields rose even further. The German 10-year yield jumped 7% to 1.54%. The divergence helped EUR/USD to move higher.

US economic data came in above expectations, with Durable Goods Orders and Pending Home Sales rising more than market consensus. The dollar did not benefit from the numbers. On Thursday, the Core PCE is due.

In Portugal, the European Central Bank started its annual conference. The highlight will be on Wednesday with a panel including ECB President Lagarde, Bank of England’s Governor Bailey and Fed’s Chair Powell.

Bullish short-term outlook

The EUR/USD is trading above 1.0580 but is showing difficulties running above 1.0600. The euro is back above the 20-day Simple Moving Average (1.0588). A daily close above 1.0600 should strengthen the recovery. The 55-day SMA awaits at 1.0620.

A decline under 1.0580 would alleviate the bullish pressure. The next support might be located at 1.0530, followed by 1.0490.

Technical levels

 

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