On Monday the 25th of March, trading on the euro closed up. In the US session, the EURUSD pair hit an intraday high of 1.1332. The pair was propped up by a broadly weaker dollar.
The pair recovered to the LB balance line, as well as the 45th degree and 50% of the drop from 1.1391 to 1.1273. The euro has rebounded from the 45th degree and at the time of writing is trading at 1.1307.
I’ve shown my predictions for the pair on the chart resulting from my analysis. It’s unclear whether the euro will continue rising, or whether downside pressure will come back in force given that traders are still cautious since the US bond yield curve inverted.
Experts having been keeping an eye on the difference between long-term and short-term (around 3 months) bond yields. The difference between 10-year and 3-month yields has now entered negative territory, while this has yet to happen between 10-year and 2-year yields.
Chicago Fed President Charles Evans yesterday said that despite justified nerves over the yield curve inversion, he is still confident about the strength of the US economy.
Trader attention today will turn towards the UK parliament, where another round of votes is set to take place. Keep an eye on the yen and US10Y bond yields. In my forecast, I’m expecting a breakout of the trend line followed by a recovery to the 67th degree at 1.1353.