EUR/USD loses bullish momentum after reaching overbought conditions

The EUR/USD pair is up this Tuesday, retreating just modestly ahead of Wall Street’s opening from a daily high of 1.2115. The pair is struggling to extend gains beyond 1.2100 after the German Trade Balance posted a surplus of €16.1 billion, below expected, FXStreet’s Chief Analyst Valeria Bednarik briefs.

Key quotes

“The dollar accelerated its slump as US Treasury yields retreated further from almost one-year highs reached this Monday. European indexes are mixed, stuck around their opening levels, leading to some pre-opening losses in Wall Street.”

“Germany published the December Trade Balance, which posted a surplus of €16.1 billion, below expected. In the same month, the Current Account Balance was also below expected but improved to €28.2 billion from €21.2 billion in November.”

“EUR/USD has surged past the 38.2% retracement of its November/January rally at 1.2070, the immediate support level. Now trading around 1.2100, the 4-hour chart shows that technical indicators are losing bullish momentum after reaching overbought levels.”