EUR/USD back below 1.0600 amid widening French/German yield spread

The EUR/USD pair witnessed aggressive selling pressure last minutes, and surrendered 1.06 handle again, after the French and German 10-year bond yield differential widened amid renewed political concerns, following reports citing France’s Juppe saying that he will not run in French presidential election race.

The spot paid little heed to upbeat Sentix Investor Confidence data, as the leading drivers continue to remain the developments surrounding the French elections and March Fed rate hike bets, which now stand around 80%. European Monetary Union Sentix Investor Confidence came in at 20.7, above forecasts (18.5) in March

With the Eurozone data out of the way, focus remains on the US factory data for fresh momentum on the pair. In the meantime, risk trends and price-action surrounding the European bond yields will be closely tracked.

EUR/USD Technical Levels

Valeria Bednarik, Chief Analyst at FXStreet noted, “Whilst the price is firmly above the 20 and 100 SMAs. The 200 SMA stands at 1.0652, while the 1.0650/60 region has proved strong in the past, being then the immediate short term resistance. Further gains beyond the level could see the rally extending up to the 1.0700/20 region, where selling interest will likely be strong enough to reject the advance.”

“Below 1.0590 on the other hand, the pair can extend its decline towards 1.0565, a Fibonacci support, followed by 1.0520, although a slide towards this last seems unlikely for today,”Valeria adds.

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