EUR/USD peeps above 50-DMA, is it a technical recovery?

The EUR/USD pair has recovered from Friday’s low of 1.0651 (two-week low) to 1.0679 this Monday morning in Asia in what appears to be a chart driven move. The 50-DMA stands at 1.0672

The RSI indicator on the EUR/USD 4-hour chart hit the oversold territory on Friday, thus opening doors for a technical correction.

Treasury yield remains at one-month low

Despite the biggest annual increase in the Fed’s preferred measure of inflation in nearly five years, the US 10-yr treasury yield remains at one-month low of 2.4%. The data released on Friday showed the year-on-year rate of increase in the PCE price index to 2.1%, the biggest gain since April 2012.

The lacklustre reaction in the treasury yields could be the one weighing over the US dollar. Still, the move from 1.0651 to 1.0679 appears to be a technical correction. Moreover, treasury yields could rise as the day progresses and may spike if the US ISM manufacturing figure shows a sharp rise in the employment and prices paid sub indices.

EUR/USD Technical Levels

The spot was last seen trading around the 50-DMA level of 1.0672. A break above 1.0714 (Mar 13 high) would expose 10-DMA seen at 1.0763 and 1.08 (zero figure). On the other hand, a breakdown of support at 1.0657 (session low) would expose 1.0630 (100-DMA) and 1.06 (zero figure).