EUR/USD broke above the 1.1300 handle on Wednesday.
Markets soured on the US Dollar after Treasury yields rose and bond demand fell.
PMI double-header on the cards for Thursday as business survey results land on both sides of the Pacific.
EUR/USD caught a bid on Wednesday, breaking through the 1.1300 technical barrier and climbing for a third straight session after market sentiment turned away from the US Dollar following a pummeling of US Treasury markets. Treasury yields rose and demand for 20-year Treasury bonds fell in a mid-session bond auction, prompting a general pullout from US assets, including the Greenback, which is generally considered a safe haven.
US 20-year Treasury yields rose above 5% on Wednesday, sparking a flight out of US capital assets. Even with the rise in yields, investors still turned apprehensive on Treasuries, with bid-to-cover ratios falling below their six-month averages. The US government is on pace to pass President Donald Trump’s “big, beautiful bill” for the federal government’s tax and budget plans, which includes steep declines in critical services spending, and even steeper declines in federal tax receipts. The budget bill is broadly expected to add up to $4T to the US deficit over the next ten years. President Trump campaigned on reducing the deficit and eliminating US government debt.
Purchasing Managers Index (PMI) figures are due on Thursday. Pan-European PMIs are expected to rise slightly across the board, while US PMIs are forecast to come mixed. European Services PMI aggregate survey results are expected to rise to 50.3 from 50.1, while the manufacturing segment is expected to improve to 49.3 from 49.0. On the US side, Manufacturing PMIs are expected to tick down to 50.1 from 50.2, while the Services component is seen holding flat at 50.8.
EUR/USD price forecast
Bullish momentum continues to push EUR/USD higher following a technical bounce from the 50-day Exponential Moving Average (EMA) near 1.1100. The pair has closed higher for all but two of the last seven consecutive trading sessions, and price action is tilted firmly to the bullish side as intraday price action looks for a foothold from 1.1300.
Technical oscillators are nearly out of room to run, implying a technical reversal could be on the cards in the near-term. However, Fiber is still trading well north of its 200-day EMA near 1.0840.
EUR/USD daily chart
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