US dollar jumps across the board amid higher yields and a reversal in stocks.
EUR/USD about to post lowest weekly close since mid-April.
The EUR/USD dropped further and reached at 1.2099, the lowest level since May 14. So far it is holding above 1.2100 but remains under pressure as the US dollar extends gains across the board.
The DXY jumped to 90.50 after trading under 90.00 hours ago. At the same time, the 10-year yield rebounded from monthly lows to 1.46%. In Wall Street, the Dow Jones is falling by 0.11% and the Nasdaq is flat.
Economic data released on Friday showed an increase above expectation in the University of Michigan Consumer Sentiment Index to 86.4 in June from 82.9. Market participants appear to be positioning ahead of the weekend and next week’s Fed meeting.
Bearish signs?
Form a technical perspective the area around 1.2100is a key support in EUR/USD. A consolidation below would leave the euro vulnerable to more losses. The next support stands at 1.2060 followed by 1.2040. If it manages to defend the 1.2100 area it could rebound. Now 1.2150 is the immediate strong resistance followed by 1.2175.
Short-term technical indicators favor the downside while the lowest close since April in the weekly chart also suggests that an extension of the bearish correction is on the cards, particular if it drops under