EUR USD is attracting strong buying as rising Treasury yields are weakening the U.S. Dollar. Traders expecting yields to rise next week as the Treasury begins another auction.
Rising Treasury yields are weakening the U.S. Dollar. Traders are also concerned that the growing federal deficit will lead to a reduction of the U.S. debt rating.
Traders are also positioning themselves ahead of next week’s Treasury auction. Debt supply is expected to increase by as much as $101 billion with more to come.
The daily EUR USD is on pace to test a 50% at 1.4184. Regaining this area sets up a further rally to 1.4621. On the hourly chart, a new main bottom has formed at 1.3899. The hourly trend will remain up until this price is violated.
The rapid rise in the EUR USD may become a concern for the European Central Bank if it begins to curtail export demand. This may not be known for some time however.