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Feb 21 - 11:55 AM

EUR/USD - COMMENT-EUR/USD Longs Encouraged But Need Data's Help

By Christopher Romano  —  Feb 21 - 11:10 AM

EUR/USD turned positive Wednesday after if fell below the 21-DMA and longs are encouraged by existing bullish conditions, but will need U.S. data for additional help.

German-U.S.
2-year yield spreads US2DE2=RR tightened Wednesday and neared short-term resistance in the -180 area.
A break of that resistance could help underpin a EUR/USD rally.

Positioning could be encouraging to longs as well.
The latest CFTC data indicated net-long euro positions are at their lowest since October 2022 which implies fewer sellers booking profits in the event EUR/USD's rally extends.

Technicals highlight upside risks.
EUR/USD rallied above the down trend line off December's high and the pair is holding above the 10- and 21-DMAs.
A monthly doji candle forming in February may be a sign the latest down trend is over.

EUR/USD investors now await U.S. weekly claims, January PCE and February payroll data.
Results indicating slower job growth and lower than expected inflation should drive U.S. yields and the dollar down.

EUR/USD may then make a run for key resistance near the 1.1000 area.

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary

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