April 13th, Strengthening of the euro is constrained by the rise in yields on US Treasuries

On Monday, April 12, at the end of the day, the EUR / USD pair increased by 0.11%, to 1.1910. The price increased to 1.1919. Before the rally, the price dropped to 1.1871 amid the British rally against the US dollar and the euro.

The news that stores, hairdressing salons and gyms were opened in England helped the British to gain strength. Also, optimism in the market was caused by the acceleration of vaccination in France, Germany and Italy.

The euro and the pound strengthened against the dollar on the growing yield of US government bonds. On Tuesday, a downward correction followed in Asia for dollar pairs, as the yield on 10-year bonds rose to 1.70% per annum.

Scheduled statistics (GMT +3):

• 12:00 Germany and the eurozone are to publish the ZEW Business Sentiment Index for April.
• 15:30 the US is to release the CPI for March (***).

Current situation:

Major currencies are trading in the red, except for the British pound. The yen and the franc are showing the biggest declines. The dollar strengthened against the background of the growth of the yield on 10-year US bonds to 1.70% per annum. At the time of this writing, the euro is worth 1.1898. The intraday low is fixed at 1.1883.

If bonds continue to fall in price, the euro remains under pressure. When investors bond, the dollar strengthens. Buyers will not be able to withstand long support from euro cross-pairs amid growing yields. To resume the rally above 1.1930, the price needs to overcome the 1.1905 level as quickly as possible. Then it will be easier to pass the 1.1920 level and update the maximum. Support is still at 1.1852. From the news it is worth highlighting inflation in the US and the ZEW index in Germany.

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