EUR/USD drops below 1.14 as USD gathers strength despite thin trading conditions
- US Dollar Index rises toward the 97 handle on Wednesday.
- An upsurge witnessed in T-bond yields boosts the greenback.
After closing the first couple days of the holiday-shortened week with modest gains, the EUR/USD pair came under pressure on Wednesday and erased its weekly gains. As of writing, the pair was trading at 1.1365, losing 30 pips, or 0.25%, on the day.
Despite a lack of macroeconomic data releases and thin trading conditions, the dollar gathered strength on the back of rising U.S. Treasury bond yields. Although it failed to break above the 97 mark, the US Dollar Index sticks to daily gains at 96.95, where it's up 0.4% on a daily basis. At the moment, the 5-year reference is up 1.6% on the day while the 10-year reference is adding a little over 1%.
On Thursday, the European Central Bank is scheduled to publish its monthly Economic Bulletin. Later in the day, weekly jobless claims, consumer confidence, and new home sales data will be featured in the U.S. economic docket.
Technical levels to consider
The pair could face the first resistance at 1.1415 (daily high) ahead of 1.1465 (100-DMA) and 1.1500 (psychological level). On the downside, supports are located at 1.1350 (daily low/Dec. 21 low), 1.1300 (Dec. 11 low) and 1.1270 (Dec. 14 low).