EUR/USD could target a rise to its 2021 high after breaking through resistance on Tuesday near 1.2185/95 that had troubled bulls, with U.S. rate views and technicals shifting in favor of the euro.
Upbeat risk sentiment drove investors into growth-related assets, buoying stocks, commodities, emerging market currencies, China's yuan CNH= and the euro.
A sharp drop in U.S. homebuilding nL2N2N41MW tempered interest rate bulls, with real US10YTIP=RR and nominal US10YT=RR yields to struggling initially and December 2022 eurodollars EDZ2 rallying, implying a push back for a Fed hike.
The rates moves weighed down the dollar, driving EUR/USD above the Feb.
26 daily high and the 76.4% Fibo of 1.2349-1.1704.
Technicals highlight upside risks for EUR/USD.
In addition to the Fibo break, daily and monthly RSIs are rising, indicating upside momentum remains.
EUR/USD also traded within a well-defined bull trend channel, the top of which is likely to be tested.
February's 1.22435 EBS monthly high and likely 1.2250 barrier option are impediments for EUR/USD bulls, but they appear vulnerable.
Breaks of those impediments will trigger stops.
6 1.2349 high would then become a target.
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