EUR/USD Falls To One-Month Lows Amid Rising U.S. Yields
Alex Boltyan | Jun 13, 2022 04:31PM ET
The EUR/USD is falling sharply for the third day in a row on Monday, hitting its lowest level in a month at 1.0403 as the dollar rallies across the board amid higher U.S. yields.
U.S. Treasury yields climbed to their highest levels in over a decade on Monday, while part of the curve inverted in the aftermath of U.S. Consumer Price Index data. The United States 10-Year rate reached a peak of 3.44%.
On Friday, data showed the U.S. inflation rate rose to 8.6% in May – its highest level in 41 years – which slammed expectations of prices beginning to cool off and raised prospects the Fed should continue on its aggressive tightening path.
The Federal Reserve will conclude its two-day meeting on Wednesday. While expectations favor a 50 bps hike this month, some analysts are now calling for a 75 bps increase following the CPI figures.
The greenback has soared across the board, dragging the EUR/USD back to test the 1.0400 area. The DXY, which measures the dollar versus a basket of currencies, reached its highest level in almost 20 years at 105.28 on Monday.
From a technical perspective, the EUR/USD holds a bearish tone according to the daily chart. Indicators are in negative territory, without reaching oversold levels just yet. The RSI has gained a steep negative slope, while the MACD prints bigger red bars, pointing to increasing selling interest.
The loss of the 1.0400 psychological level would expose the 2022 lows at 1.0348 and then 1.0300. On the other hand, the EUR/USD needs to recover the 20-day SMA, currently around 1.0650, to ease the short-term bearish pressure and move toward 1.0700.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.