EUR/USD falls to 1.1916, nears a test of its 100-hour moving average
It is all about the dollar and yields in European morning trade, as a surge in the former is keeping the greenback bid throughout the session so far.
EUR/USD has now fallen to a low of 1.1916 and nears a test of its 100-hour moving average (red line) @ 1.1909 after having seen sellers wrestle back some near-term control on a break below the 200-hour moving average (blue line) earlier.
Although there is a large expiry rolling off at 1.1930 today, the bond market narrative overrides everything else at the moment and the prospect of higher yields continues to keep the dollar underpinned across the board.
The market managed to breathe in some relief earlier in the week as Treasury yields stabilised but the spike higher today is starting to unnerve investors again.
The "buy everything" rally is turning back to the "sell everything" panic as the wild volatility swings continue to play out since last week.
The Fed will have plenty to address next week as I'm not sure that a market that relies so heavily on every PEPP data and Treasury auction can be called a "healthy" one.
In any case, the moves in Treasuries so far today is but a reminder that despite all the calm and silent exterior from time to time, the market can be prone to wild bouts of volatility and selloffs given the current macro landscape/backdrop.