EUR/USD pushes higher as dollar weakens further on the day
EUR/USD touches a session high of 1.1388
There's just no reprieve for the dollar as December begins it seems. Improved risk sentiment on trade led to a decline in the greenback yesterday and today it's all about Treasury yields despite the feel good factor in risk abating.
The greenback is falling to session lows against the rest of the major bloc now as we get closer to European markets open and there is no doubt worries are starting to emerge for the dollar as the yield curve starts to invert. The worry here is that it has triggered the time bomb for an imminent recession to come but there's also a case to be had that this will only serve to cause the Fed to pause the tightening cycle early next year.
For now though, this has seen the dollar weaken and EUR/USD is pushing back towards 1.1400 as price looks to clear the resistance region between 1.1474-84 which stalled yesterday's upside move.
As mentioned yesterday, it's still hard to see the euro rally by too much with key resistance levels around 1.1400 and 1.1410-20 still firmly keeping a lid on the pair. However, it's hard to discount the worrying yields story in the dollar as well. This is something that could potentially make itself a game changer over the next few months and weaker Treasury yields also takes away some allure from the dollar, especially for market participants who are seeking higher yields to place hot money.
It's still early in the session now but as long as yields are unable to get off the floor, I reckon the dollar will have a similar story today as well.