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EUR/USD trims gains, bond yield spread supports EUR

FXStreet (Mumbai) - The EUR/USD pair trimmed losses to trade around 1.1358 levels after having failed to take out hourly 200-MA at 1.1375.

US-German 10-yr yield spread narrowed

The benchmark bond yield spread gained importance ahead of Thursday’s ECB meeting as the central bank is widely expected to hint at more QE and/or negative interest rates. The spread was hovering around 148 basis points (bps) on Monday, before falling to 143 bps today.

The drop in the yield spread favours EUR, however, the spot still remains under pressure ahead of tomorrow’s ECB meeting.

EUR/USD Technical Levels

The pair trades around 1.1358. The immediate support is located at 1.1343 (hourly 50-MA), under which the losses could be extended to 1.1305 (Oct 19 low). A break below the same would expose the 50-DMA located at 1.1261. On the other side, resistance is seen at 1.1375 (hourly 200-MA) and 1.14 levels, above which gains could be extended to 1.1460 (Sep 18 high).

GBP/USD reverts to 1.5450 on UK data

The GBP/USD pair bounced-off lows just ahead of 10-DMA located at 1.5407 and recovered losses following the release of above estimates public finances data from the UK.
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