- US dollar supported by rising US Treasury yields.
- EUR/USD sentiment mixed.
The 10-year US Treasury yield hit a 12 month high of 1.196% in the European session, boosting the US Dollar Index. US Treasury yields have been rising over the last few weeks as the US economy picks up from its pandemic low.
As inflation expectations rise, longer-dated US Treasuries reflect this by moving higher. The 10-year US Treasury offers over 160 basis points more yield than the German 10-year Bund, supporting the US dollar against the Euro.
Horizontal resistance around 1.2055 caps the upside, beyond there the 20-day simple moving average brings another level of resistance at around 1.2100. EUR/USD support can be seen at 1.1920 and a break through here could take the pair to levels seen at the end of November.