The Euro has gone back and forth during the course of the trading session on Monday, as we continue to see the 1.20 level offer a little bit of support.
The direction of the EUR/USD on Monday is likely to be determined by trader reaction to the 50% level at 1.2074.
The pool of euro zone government bonds with a negative yield shrank by nearly a fifth in February as a broad selloff in global bond markets forced traders to dump safe-haven debt, data from electronic bond trading platform Tradeweb showed on Monday. Government borrowing costs from the United States, Germany to Australia ended February with their biggest monthly rises in years as expectations for a post-pandemic ignition of inflation roiled global markets. Tradeweb said the market value of euro-denominated government bonds traded on its platform with a negative yield stood at around 5.57 trillion euros ($6.70 trillion) at the end of February.
The pool of euro zone government bonds with a negative yield shrank by nearly a fifth in February as a broad selloff in global bond markets forced traders to dump safe-haven debt, data from electronic bond trading platform Tradeweb showed on Monday. Tradeweb said the market value of euro-denominated government bonds traded on its platform with a negative yield stood at around 5.57 trillion euros ($6.70 trillion) at the end of February. Tradeweb data also showed a 1.18 trillion-euro pool of negative-yielding euro-denominated investment grade paper -- almost 33% of the market at the end of last month, down from almost 43% in January.
EUR/USD is testing the resistance level at 1.2080.
European stock markets surged Monday, boosted by healthy manufacturing data in the region, a semblance of calm in global bond markets and more positive news of Covid-19 vaccines. European PMI data came in ahead of expectations, climbing to 57.9 in February from 54.8 last month, with the dominant German manufacturing sector expanding at an impressive rate. Government bond yields have stabilized at the start of the week after last week’s sharp gains, lessening the pressure on stock markets as rising yields made equities look less attractive to investors.
It’s a busy day ahead, with manufacturing sector PMI figures in focus. Disappointing PMIs from China failed to weigh on risk sentiment, with optimism overshadowing weaker headline numbers.
Overall currency markets are confronted by a crucial yet extremely cautious week ahead. Price ranges this week are running at the widest points in many months and adds to the potential of big moves.
The Euro shot higher during the week but pulled back to form a bit of an exhaustion candle. However, I think we are still very much in a bullish attitude.
The direction of the EUR/USD into the close on Friday is likely to be determined by trader reaction to 1.2151.
The Euro has fallen a bit on Friday to reach down towards the 50 day EMA yet again. The market is still very much in a bullish trend longer term.
EUR/USD settled below the support at 1.2155 and is trying to settle below the next support level at 1.2130.
The dollar climbed higher in early European trading Friday, lifted by a sharp rise in U.S. Treasury yields, while riskier currencies were hit hard amid fears central banks will have to tighten sooner than previously expected. ”While Powell has for now promised that sizable bond purchases will continue, the time to start to tweak that communication may not be that far into the future.”
European stock markets are seen opening firmly lower Friday, continuing the global selloff after a sharp rise in bond yields weighed on sentiment. At 2:10 AM ET (0710 GMT), the DAX futures contract in Germany traded 0.7% lower, CAC 40 futures in France dropped 1.6% and the FTSE 100 futures contract in the U.K. fell 1.4%. The global weakness started on Wall Street overnight, as the tech-heavy Nasdaq suffered its worst day in nearly four months.
Economic data from the Eurozone and the U.S will be in focus later today. Market reaction and Iran’s response to U.S military action in Syria will also influence.