EUR/USD: Bears re-enter, offered at 1.0878

EUR/USD: Bears re-enter, offered at 1.0878
FXStreet (Mumbai) – The EUR bears are making their presence felt in the early US session, as the uptick in the EUR/USD pair stalled at high of 1.0878, followed by a sell-off to 1.0857 levels.

Bond yield spread favours US dollar

The pair is responding to the slight widening of the US-German 10-year bond yield spread to 161.5 basis points. Meanwhile, the USD is also being supported by the two-year treasury yield, which is trading at a fresh 2-1/2 week high of 0.714%. A rise in the short duration yield, represents the rising interest rate expectations in the US.

Given the light economic calendar in the US, the spot could continue to track the movement in the interest rate sensitive short duration treasury yields in the US.

EUR/USD Technical Levels

The immediate support is seen at 1.0845 (61.8% Fib R of Mar-May rally), followed by another support at 1.08 handle. On the flip side, a break above 1.0872 (hourly 100-MA) could push the spot higher to 1.09.
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EUR/USD: Bears re-enter, offered at 1.0878
Source: FXStreet