The greenback strengthened against a number of major currencies, as the US 10 year bond yield broke the 3% level once again. The yield had surpassed once again the 3% hurdle, near the end of April, causing the US Dollar to rally, however yesterday it hit a seven year high reaching 3.095%. Analysts, consider that the rise in the 10 year benchmark Treasury bond yield added to the US Dollar’s relative yield appeal against higher risk and higher yielding rivals. The drop in the prices of gold could be indicative of the prementioned appeal. Should the yield continue to rise we could see the USD strengthening and vice versa.
EUR/USD dropped yesterday breaking the 1.1882 support line approaching the 1.1806 support line and stabilizing somewhat. Should the USD strengthening momentum continue we could see the pair dropping further. Also, Eurozone’s financial data releases could weaken the EUR side. Should the bears take over we could see the pair dropping, breaching the 1.1806 support line and aiming for the 1.1715 support barrier. On the other hand should the bulls be in the driver’s seat we could see the pair breaking the 1.1882 resistance level and hover above it.