EURUSD extended the recent advance towards the 1.0930 zone where the 100-DMA capped gains

The euro has been rising for the second session in a row on Tuesday as the US dollar keeps retreating these days. The USD index derailed the 200-DMA, threatening the 103.00 psychological level now even as Treasury yields stay elevated. By the way, US stocks rose overnight despite a climb in Treasury yields that reached their highest level since November 2007 at 4.36% before retreating toward 4.3%. 

The shared currency may see more gains at this stage as it looks like the dollar could see deeper losses in the near term as traders nervously await Powell’s speech at Jackson Hole later in the week. A lack of hawkish tone from the Fed governor would put the buck under more intense pressure ahead of the weekend.

EURUSD extended the recent advance towards the 1.0930 zone where the 100-DMA capped gains earlier in the day. The pair has retreated marginally since then, staying in positive territory during the European session as the US dollar remains pressured amid more upbeat risk sentiment across the financial markets.

The common currency needs to overcome the mentioned 100-DMA in order to see more gains in the near term. Otherwise, a failure to regain the 1.0950 intermediate barrier on the way towards the 1.1000 psychological level would bring back selling interest, especially as the greenback remains supported by the resilience of the US economy coupled with elevated Treasury yields. A break above the 1.0930-1.0950 resistance is needed for the downside risks to dissipate.

Anyway, the shared currency looks inducive ahead of Powell’s speech at Jackson Hole. Fed governor is expected to outline his view of the US economy. Investors will be paying close attention to what Powell says about the Fed’s success in combating inflation.


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