EURUSD falls on inflation talk.
EURUSD under the bearish pressure today – mainly under the effect of the widespread dollar optimism as U.S. bond yields jumped on the prospects of further economic recovery in USA and a possible acceleration in inflation. Soaring U.S. bond yields inspired dollar bulls, with the 10-year yield rising as high as 1.333% from around 1.20% from last week. If U.S. yields will rise further, we can see more gains in the dollar. The markets optimism about dollar also rose when the New York Federal Reserve’s Empire State manufacturing report painted an upbeat economic picture, with a rise in its “prices paid index” indicating faster inflation. That optimism was repeated by St. Louis Fed President James Bullard, who told CNBC that U.S. financial conditions were “generally good,” and that inflation was likely to heat up this year. Any talk about USA inflation is very dollar bullish and should lead to further EURUSD losses.
Expect sellers on upward corrections.
Next support to watch – 1.2020
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