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.
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.
