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Thomson Reuters
May 13 - 12:12 PM
EUR/USD - COMMENT-EUR/USD Gains On Trade-Fear Safety Flows, Sort Of
First appeared on eFXplus on May 13 - 10:55 AM

The bloom is off the rose for U.S.-China trade sentiment as safe havens such as the yen, Swiss franc and U.S. Treasuries are rising, creating an opening for EUR/USD gains as well. Today's announcement by Beijing nL5N22P3LQ of retaliatory tariffs on U.S. goods entering China has cratered risk.
The decline in U.S. yields from the Treasuries rally has reduced the attractiveness of dollar longs, and may make some of those sitting on such positions nervous. It is also pulling EUR/USD higher with the tightening of DE-U.S.
yield spreads, in spite of negative Euribor rates, out to March 2022.
EUR/USD is finding resistance ahead of the daily cloud base at 1.1273, by the 55-DMA at 1.1261.
A move into to cloud puts the 100-DMA at 1.1319 and a down trend-line, from January and March tops, in focus at 1.1354, with the 200-DMA at 1.1401 capping.
But, with little momentum for rate hikes by the Fed or the ECB the 200-DMA is likely to hold.

EUR Chart: Click here

Major Futures Strips: Click here

Source:
Thomson Reuters IFR Markets

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