EURUSD traders today are focused on Italy-German yield spread and Powell testimony. Meanwhile, the 26 February EURUSD Technical Analysis discusses how the pair trades.
Rise in Italy-German Yield Differential EUR Impact
However, the resilience may not last long if the Italy-German 10-year bond yield spread starts widening ahead of the Italian elections (due on March. 4). It is believed that Neither the center-left, the center-right, or the populists are likely to command a majority in parliament. So the spread may widen in the EUR-negative manner, i.e. German yields could drop due to rise in safe-haven demand.
That said, all is not lost for the EUR/USD bulls as lack of new information on the path of interest rate hikes from Powell testimony (due later today) could yield another round of sell-off in the greenback. Kathy Lien from BK Asset Management believes Powell does not expect much in the ways of specifics from Powell outside of optimism and a vague plan to raise interest rates.
26 February EURUSD Technical Analysis
Shorter term, and according to the 4 hours chart, the risk remains skewed toward the downside as a selling interest surged around a bearish 20 SMA, which crossed below the larger ones, while technical indicators stand within a negative territory, with limited bearish strength.
Support levels: 1.2250 1.2205 1.2160
Resistance levels: 1.2340 1.2380 1.2425
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