EUR/USD – Stays Firm into Fed Meeting, Long Bets Remain the Risk

The Euro finished up 0.30% to 1.1336 from 1.1295 yesterday. It was the best performing currency against the Greenback overnight. EUR/USD traded to an overnight low at 1.12410 before grinding higher to a peak at 1.13638 before settling lower. The shared currency benefitted from a narrowing of yield differentials between the US and Germany. Ten-Year US treasuries were at 0.83% (0.87%) while Germany’s 10-year Bund yield closed at -0.31% from -0.32%. Market participants are expecting the US Federal Reserve to keep a more dovish stance at the conclusion of its meeting today.

EUR-USD 4H Chart - LiveCharts UK - 10 June 2020
EUR-USD 4H Chart – LiveCharts UK – 10 June 2020

Speculators remain bullish on the Euro which shows in the market positioning. We reported yesterday that speculative long Euro bets increased in the latest COT report (week ended 2 June) to +EUR 81,240 from the previous week’s +EUR 75,222. A less dovish leaning Fed or a less pessimistic Jerome Powell could see the Euro bulls head for the exits.

EUR/USD has immediate resistance at 1.1360 followed by 1.1400. Immediate support lies at 1.1290 followed by 1.1240. Look to sell rallies in a choppy session with a likely range of 1.1200-1.1370.

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