Forex Analysis by David Scutt covering: Euro US Dollar, US Dollar Index Futures, United States 2-Year, United States 5-Year. Read David Scutt's latest article on Investing.com
Economic sentiment towards the US and Europe is diverging quickly, which in an early contrarian warning signalremains inversely tied to US interest rates, with rising US bond yields pushing the pair lower. Strong US data and weak European performance have widened yield spreads, further pressuring EUR/USD. Despite being oversold, that doesn’t mean the trend may continue. Key support is at 1.0760, and traders should wait for clear setups before acting.bonds over the past six months.
The proportion of US data beating forecasts has risen to the highest level since April, contributing to a reduction in the amount of rate cuts the Fed is expected to deliver over the current easing cycle. Views towards Europe are incredibly low, making it easier for the data to impress, especially as PMIs measure change from one month to the next. The opposite is true for the US series given expectations are so elevated.
If the price were to break below and hold there, you could sell with a tight stop above for protection. There’s not a lot of visible support below until 1.06677, where it attracted buying earlier in the year. That's a potential target.
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