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EUR/USD: dumped on EUR/GBP good-Brexit-news sell-off and US yields spiking

  • EUR/USD overdone on sterling flows?
  • EUR/USD to find a safe haven bid at some stage?

EUR/USD bears are all over it in the NY session with action kicking off and sending the dollar bid and US yields through the roof. Currently, EUR/USD is trading at 1.1846, down -0.45% on the day, having posted a daily high at 1.1920 and low at 1.1845.

EUR/USD is dropped in pursuit of the 23rd Nov channel, busting through 1.1860 channel resistance and starting to stabilise the 30 pip drop. EUR/GBP lead the way with the recent news that the EU and Britain have finally come to an agreement on the so-called 'divorce settlement bill'. EUR/GBP is more than 118 pips off the high today while GBP/USD is 150 pips bid on multiple reports of the good news for Brexiteers. 

Britain agrees to liabilities worth €100bn but will aim to pay less than half - Financial Times

Meanwhile, DXY is up +0.26% within the range of 92.827 - 93.245 while US 10-years are back to being +0.7% in the session between 2.3082% - 2.3383%. 

In other news, N.Korea risk is back on the table and that is keeping risk toned down as we approach the final hours of trading in NY, with Wall Street off its highs and a bid on gold and the yen. Reports stated that N.Korea had fired a missile that, after flying for 50 minutes, the rocket reportedly landed offshore in Japan's exclusive economic zone - Japan PM ordered an emergency cabinet meeting on the matter and South Korea are stepping up to the plate as well apparently - Risk off tone under similar and previous geopolitical circumstances had been supportive to the euro when investors sought out refuge in bonds and safe havens, ultimately weighing on the greenback in the short term. 

S.Korean Military: N.Korea fired 1 ballistic missile from South Pyongan Province

EUR/USD levels

Valeria Bednarik, chief analyst at FXStreet explained that the EUR/USD pair seems technically poised to extend its decline in the short term, as in the 4 hours chart, the pair settle below its 20 SMA for the first time in a week, while the Momentum indicator entered negative territory, with a strong bearish slope. "The RSI indicator, however, holds around 53, indicating that selling interest remains limited, and that the ongoing decline could be understood as corrective. Below 1.1860, the downward corrective movement can extend further, toward the 1.1820/30 region, where buying interest will likely re-appear."

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