Ichimoku analysis (4-hour chart)
Tenken-Sen- 1.06326
Kijun-Sen- 1.06207
EURUSD upside capped by 200-4H EMA and showed a minor sell-off on surging US treasury yield. Markets eye US initial jobless claims and Fed member Waller speech for further direction. The pair jumped to 1.06914 yesterday after upbeat German CPI data. It came at 0.80% vs. an estimate of 0.50%. EURUSD hits an intraday high of 1.06262 and is currently trading around 1.06308.
The US manufacturing PMI jumped to 47.70 last month from 47.4 in Jan, below the estimate of 48. While ISM manufacturing prices rose to 51 from a forecast of 45.
According to the CME Fed watch tool, the probability of a 50 bpbs rate hike in Mar increased to 30% from 24% a week ago.
The US 10-year yield surged sharply and holds above 4%, the highest level since Nov. The US 10 and 2-year spread widened to -89 basis points from -77% bpbs.
Technical:
The pair is trading above short-term 21 EMA, 55 EMA, and long-term (200-EMA) in the 4-hour chart. Any break below 1.05700 confirms intraday bearishness; a dip to 1.0530/1.0500 is possible. The near-term resistance is around 1.0700. The breach above will push the pair to 1.08000/1.08850.
Indicator (4-hour chart)
CCI – Bullish
Directional movement index – Neutral
It is good to sell on rallies around 1.0660 with SL around 1.0710 for a TP of 1.0480.
