EURUSD rebounds above 1.1500 on board-based US dollar selling. The demand for riskier assets increased on easing Covid restrictions in China. The chance of less aggressive Fed rate hikes and declining US treasury yields dragging the US dollar further down. It hits an intraday low of 1.05308 and is currently trading around 1.05241.
Markets eye ECB President Lagarde's speech for further direction.
According to the CME Fed watch tool, the probability of a 50 bpbs rate hike in Dec declined to 74.70% from 75.80% a week ago.
The US 10-year yield gained more than 1.5% from yesterday's low of 3.404%. The US 10 and 2-year spread widened to -83.30 basis points from -67 bpbs.
Technical:
On the higher side, near-term resistance is around 1.0550 and any convincing breach above will take the pair to the next level of 1.0600/1.0660.
The pair's immediate support is at 1.0435, breaking below targets of 1.0370/1.02900.
Indicator (4-hour chart)
Directional movement index – Neutral
CCI(50)- Bullish
It is good to buy on dips around 1.0490 with SL around 1.0430 for a TP of 1.0660.
