EUR/USD Stalls as US Treasury Announcement Sparks Volatility
EUR/USD is struggling to extend its gains on Wednesday as the US Treasury's bond-buyback announcement sparks volatility, pushing Treasury yields higher and trimming USD losses. The pair is currently trading around 1.1640 as it attempts to break above the 200-day Simple Moving Average (SMA) at 1.1633.
Strategists at Scotiabank expect a hawkish hike from the European Central Bank (ECB) on Thursday, with President Lagarde unveiling the latest forecast and signaling ongoing concern about upside risk. This is expected to underpin the recent recovery in EUR/USD, which has formed a sequence of higher highs and higher lows since recovering from below 1.1400 in late July.
The daily Relative Strength Index (RSI) has steadied above the neutral 50 level and points higher near 58, indicating healthy but not excessive bullish momentum. However, buyers still need a decisive break above the 200-day average to strengthen the bullish outlook.