July 7 2021
The EURUSD fell sharply yesterday, and is now just above 1.1800. The EUR, having failed to take out resistance at 1.1900, reversed to test support.
Initial resistance is at 1.1840/50 and the EUR Bulls need to take out this resistance to relieve downside pressure. If 1.1850 is cleared then 1.1890/1.1900 will again be the next target.
Support at 1.1800 look likely to be tested sometime soon, maybe today’s FOMC minutes will be the catalyst. However, I would expect to find more support at 1.1780/60 and at this years lows of 1.1720/1.1700.
The JPY has been the major beneficiary of the sharp fall in US Bond yields this week, it was also supported by the current risk off environment.
The EUR broke support at 131.40 and has dropped to the key support level of 130.60/40 a break here would open up a test of 130.00 and possibly 129.60
Immediate resistance is now found at 130.90/131.00, which if broken would set up a run at 131.40.
Although the EUR is under pressure, it looks somewhat oversold particularly against the JPY, which may be vulnerable to a snap higher in US bond yields, and a change in market sentiment to risk on.
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