EUR/USD drops below 200-DMA, 2-yr treasury yield above 0.80%

By FXStreet FXStreet (Mumbai) – The bid tone on the USD continued to strengthen in the wake of an uptick in the Treasury yields, pushing the EUR/USD pair below its 200-DMA located at 1.1233 levels.

EUR/USD drops to 1.1217

The spot hit another session low of 1.1217 as the two-year yield in the US erased early losses to trade 1.7 basis points higher at 0.815%. The 2-yr yield, which mimics short-term interest rate expectations, rose to a 4-year high of 0.8% on Tuesday, confirming an upside breakout from the multi-week range of 0.65%-0.75%.

Consequently, the bid tone on the USD strengthened ahead of the monthly CPI report, which could show the core inflation ticked higher in August.

EUR/USD Technical Levels

The immediate support is seen at 1.12, under which the spot could target 1.1143 (100-DMA). On the higher side, a break above the immediate resistance at 1.1233 (200-DMA) and 1.13 levels.
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Source:: FX Street