EUR/USD remains under pressure and now flirts with a potential visit to the 1.2100 neighbourhood. EUR/USD interrupts two consecutive days with gains and now meets some downside pressure despite the initial uptick to new monthly levels in the 1.2150 region.
The corrective downside in the pair comes on the back of the pick-up in the buying interest around the dollar, in turn sustained by the strong bounce in US yields. In fact, yields of the us 10-year note climb to new 2-week highs in the vicinity of 1.70%, fading the post-FOMC pullback to the vicinity of 1.60%.
From a technical perspective, the outlook for EUR/USD appears relatively mixed, as price struggles to penetrate range resistance at 1.2170 – 1.2190.The premature formation of a Shooting Star candle could inspire sellers in the near term and generate a pullback to key support at 1.2080, with a break below probably garnering follow-through and bringing the 1.2000 handle into the cross hairs. However, if 1.2100 holds firm, a challenge of the February high (1.2243) is hardly out of the question.