The pair showed a minor pullback on upbeat market sentiment. Overall bias remains bearish as long as resistance 0.8900 holds. It hit a low of 0.87355 and is currently trading around 0.87868.
The U.S. 10-year Treasury yield fell last week, even with strong job growth in the Non-Farm Payroll (NFP) report. This decline happened because weak manufacturing and services data made investors worry about economic slowdowns, leading them to favor safe assets like Treasuries. Investors are also less concerned about long-term inflation, which helps keep yields lower. Additionally, ongoing uncertainty and cautious market sentiment have increased demand for long-term bonds. Finally, signs from the Federal Reserve about interest rates may also be contributing to the lower yields.
Technical Analysis
The pair is currently trading below the 34- and above 55-EMA on the 4-hour chart.
Near-Term Resistance: Current resistance is at 0.8835. A break above this level could lead to targets at 0.8880/0.8900/0.8960/ 0.9000/0.90480. The break above 0.87500 confirms that the decline from 0.9225 was completed at 0.83750.
Immediate Support: The next support level is at 0.8750. If this level is broken, the pair could drop to 0.8720/0.8700/0.8660/0.8600/0.8580, 0.8550, 0.8525, 0.8499, 0.8440, 0.8420, 0.8390, 0.8365 (61.8% Fibonacci projection), or even 0.8340.
Indicator Analysis (4-hour chart)
- CCI (50): Bearish
- Average Directional Movement Index: bearish
Overall, the trend remains weak
Trading Recommendation
Consider sell on rallies around 0.8848-50, with a stop loss set at 0.8900 and aiming for a target price of 0.8750.
