EUR/USD ignores uptick in T-yields, clocks fresh 5-1/2 week highs

The EUR/USD pair remains well bid in Asia despite the uptick in the treasury yields, as investors continue to cheer Wilder’s loss in Dutch elections.

EUR/USD extended overnight gains to 1.0774, its highest level since February 6. The 10-yr and 2-yr treasury yield is up at least one basis point.

Cross driven strength

The uptick seen in Asia is largely due to the rally in the EUR/JPY cross. It was feared that Asian investors would be scared out of European assets if the ‘wrong sort’ of populism gains ground in Europe.

However, Wilder’s fall in Dutch elections has decreased the odds of anti-EU parties coming to power elsewhere in Europe. Le Pen’s odds of victory in French elections dropped below 30%.

Consequently, EUR/JPY is on the rise and that is keeping the EUR/USD on the front foot in Asia. Given the light data calendar, the EUR/USD spot remains at the mercy of the

EUR/USD Technical Levels

A break above the psychological level of 1.08 (inverse head and shoulder neckline) would expose 1.0829 (Feb 2 high) and 1.0873 (Dec 8 high). On the other hand, a breakdown of support at 1.0762 (session low) would open up downside towards 1.07 (zero figure), under which a major support is seen at 1.0645 (50-DMA).