The Euro climbed to a fresh 3-month high at 1.14223 overnight before easing to settle at 1.1375 in New York, up 0.3% from 1.1335 yesterday. Euro bulls continued to drive the shared currency higher. Broad-based Dollar weakness was the catalyst for the Euro’s move north. Germany’s 10-year Bund yield closed 2 basis points lower to -0.33%. The US key 10-year rate was down 10 basis points to 0.73%. The narrowing yield gap will be supportive for the Euro.
The Euro’s up move is overextended. We highlighted earlier this week that speculative Euro long bets rose to +EUR 81,240 contracts from the previous week’s +EUR 75,222. The EUR/USD pair is begging for a correction.
EUR/USD has immediate resistance at 1.1400 followed by 1.1430. Immediate support can be found at 1.1340 followed by 1.1280. Look to sell rallies in a likely range today of 1.1280-1.1410.