EUR/USD: 100-day MA is proving a tough nut to crack
- The EUR/USD pair was offered around the 100-day moving average (MA) in Asia.
- The long-term MA has caught highs on a daily closing basis four times in the last 2.5 weeks despite the falling US-DE yield spread.
- A daily close above the 100-day MA would strengthen the bull grip.
The EUR/USD pair is currently trading at 1.1438, having faced rejection above the 100-day MA of 1.1370 in Asia.
Notably, the pair has failed four times in the last 2.5 weeks to scale the long-term MA hurdle on a daily closing basis. Moreover, that is somewhat confounding, as the yield differentials have narrowed substantially in the USD-negative manner in the last few days.
For instance, the spread between the US and German two-year government bond yields stood at 300 basis points on Jan. 1 - the lowest level since Apr. 24, 2018. Further, the 10-year yield spread also hit a seven-month low of 240 basis points last week.
Moreover, the yield differentials could drop further in favor of the EUR, courtesy of dovish Fed expectations. So, the path of least resistance for the EUR/USD pair is on the higher side.
That said, the repeated technical failure at the 100-day MA could prove costly, especially if the yield differentials rise sharply in the near future, in which case the low of 1.12 could be breached.
As for today, 1.14 could come into play, if the Eurozone consumer confidence, due at 10:00 GMT misses estimates.
EUR/USD Technical Levels
Today Last Price: 1.1438
Today Daily change: -39 pips
Today Daily change %: -0.340%
Today Daily Open: 1.1477
Previous Daily SMA20: 1.1394
Previous Daily SMA50: 1.1374
Previous Daily SMA100: 1.148
Previous Daily SMA200: 1.1643
Previous Daily High: 1.1484
Previous Daily Low: 1.1396
Previous Weekly High: 1.1586
Previous Weekly Low: 1.1309
Previous Monthly High: 1.1486
Previous Monthly Low: 1.1269
Previous Daily Fibonacci 38.2%: 1.1451
Previous Daily Fibonacci 61.8%: 1.143
Previous Daily Pivot Point S1: 1.1421
Previous Daily Pivot Point S2: 1.1365
Previous Daily Pivot Point S3: 1.1333
Previous Daily Pivot Point R1: 1.1509
Previous Daily Pivot Point R2: 1.1541
Previous Daily Pivot Point R3: 1.1597