EUR/USD holds onto daily gains, looking at 1.1450

• EUR/USD manages to remain above 1.1400, with a modest bullish bias.
• US dollar weaker amid a retreat in yields and risk appetite.

The EUR/USD is moving sideways between 1.1425 and 1.1445 on Wednesday with a bullish bias, on the back of a weaker greenback across the board and amid tightening expectations from the European Central Bank.  

DXY and yields down, stock up

The US Dollar Index (DXY) is falling 0.20% on Wednesday affected by the decline in US yields that moved away of multi-month highs. The US 10-year stands at 1.92% and the 30-year at 2.22%. Also higher equity prices weigh on the dollar. In Wall Street the Dow Jones again 0.82% and the Nasdaq 1.53%.

Market participants await Thursday US CPI reading. The index is expected to have climbed in January to 7.3% (annual rate).  The numbers will likely influence on market expectations about the Federal Reserve’s policy.

The EUR/USD is up more than 150 pips from the level it had a week ago on the back of a change in tightening expectation from the ECB. The rally found resistance at the January top at 1.1480/85. The mentioned area continues to be a key level that if broken would clear the way for 1.1500 and more.

In the very short-term while above 1.1425, the intraday bullish bias is likely to remain in place. A slide below would expose again 1.1400. The next support below stands at 1.1370/80, the last defense to the current positive short-term outlook for the euro.

Technical levels