EUR/USD – Supported by 200-DMA, nears 1.10 handle

EUR/USD found bids in early Asia around the daily 200-MA level located at 1.1078 and jumped to a high of 1.1092 before retreating slightly to trade around 1.1087 at the time of writing.

Rise in Treasury yields support USD

Yields hardened in Asia, thus ensuring the gains in the EUR/USD were restricted around 1.1092 levels. Friday’s US non-farm payrolls data highlighted the economy is on fire and added further credence to the popular belief that Fed is way being the curve.

The data saw Dec rate hike bets jump to 48% from pre-data level of 38.2%. USD spiked across the board with EUR/USD hitting an NY session low of 1.1046 before ending the day above 200-DMA. The slight recovery seen in Asia appears chart driven.

EUR/USD Technical Levels

A break above 1.11 handle would open doors for 50-DMA level of 1.1150. A cut higher would expose 1.1229 (100-DMA) – 1.1234 (Aug 2 high). Acceptance above 1.1234 may force bears to unwind positions which could result in a spike to 1.13 handle.

On the lower side, breach of 200-DMA at 1.1078 could yield a move to 1.10 handle, where a violation could prove fatal resulting in a drop to 1.0952 (July 25 low) – 1.0911 (Brexit day low).