EUR/USD failed in its second attempt in as many days to clear the 10-DMA, leading to growing frustration that may test the resolve of those who are long. Yield spreads between the U.S. and Germany continue to give the greenback a substantial yield advantage, which helps limit topside potential.
Until euro zone yields start rallying steadily, EUR/USD is unlikely to break out of its longer-term bear market.
Even if it manages to clear the 10-DMA, there are plenty of hurdles to take its place -- including the 21- and 55-DMAs, as well as the daily cloud base.
Bigger resistance in the 1.1750/1.1800 zone would be an even larger obstacle for bulls.
EUR/USD's consolidation of long-term losses within the 1.1500/1.1850 range is likely to persist, and technicals suggest this phase should resolve with a break lower.
Once that break occurs bears are likely to initially target support in the 1.0900/1.1000 zone.
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