Yesterday’s trade saw EUR/USD within the range of 1.0808-1.0872. The pair closed at 1.0827, down 0.03% on a daily basis and marking a fourth consecutive trading day of losses. The daily low has also been the lowest level since April 24th 2015, when the cross registered a low of 1.0783.
At 7:07 GMT today EUR/USD was up 0.06% for the day to trade at 1.0831. The pair touched a daily high at 1.0835 at 3:00 GMT.
Fundamentals
Euro area
A possible Grexit in 2016?
Economic experts said there still was a possibility for Greece to part ways with the common currency zone by the end of next year. 71% of respondents in a Bloomberg survey believed that might be the case. In addition, almost 50% of survey participants said the 86-billion-euro bailout might prove to be insufficient.
“Without some form of debt relief, the package will never be big enough,” Peter Dixon, a global economist at Commerzbank AG in London, said in a response to the survey, cited by Bloomberg. “Loading additional loans onto a country which cannot afford to repay them corresponds to Einstein’s definition of insanity: Trying the same thing over and over again in the expectation of different results.”
United States
Rate hike expected as early as September?
The US dollar received support, as the Fed President for St. Louis, James Bullard, bolstered expectations that borrowing costs in the United States could be raised at the central banks meeting in September. Yesterday Bullard told the Fox Business network that the Federal Reserve is likely to introduce the first rate hike in a decade as early as September, as annual consumer inflation is poised to reach the central banks inflation target, while the rate of unemployment is set to slide below 5%.
Bond Yield Spread
The yield on German 2-year government bonds went as high as -0.205% on July 20th, or the highest level since June 16th (-0.204%), after which it slid to -0.210% at the close to gain 1.2 basis points (0.012 percentage point) on a daily basis.
The yield on US 2-year government bonds climbed as high as 0.710% on July 20th, or the highest level since July 2nd (0.716%), after which it fell to 0.706% at the close to gain 3.7 basis points (0.037 percentage point) for the day.
The spread between 2-year US and 2-year German bond yields, which reflects the flow of funds in a short term, expanded to 0.916% on July 20th from 0.884% during the prior day. The July 20th spread has been the most notable one since July 1st, when the difference was 0.927%.
Meanwhile, the yield on German 10-year government bonds soared as high as 0.813% on July 20th, after which it slid to 0.757% at the close to lose 3.3 basis points (0.033 percentage point) compared to July 17th, while marking a second straight day of losses.
The yield on US 10-year government bonds climbed as high as 2.396% on July 20th, or the highest level since July 16th (2.398%), after which it slipped to 2.372% at the close to gain 2.5 basis points (0.025 percentage point) on a daily basis.
The spread between 10-year US and 10-year German bond yields expanded to 1.615% on July 20th from 1.557% on July 17th. The July 20th yield difference has been the highest one since July 15th, when the spread was 1.616%.
Pivot Points
According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 1.0836. In case EUR/USD manages to breach the first resistance level at 1.0863, it will probably continue up to test 1.0900. In case the second key resistance is broken, the pair will probably attempt to advance to 1.0927.
If EUR/USD manages to breach the first key support at 1.0799, it will probably continue to slide and test 1.0772. With this second key support broken, the movement to the downside will probably continue to 1.0735.
The mid-Pivot levels for today are as follows: M1 – 1.0754, M2 – 1.0786, M3 – 1.0818, M4 – 1.0850, M5 – 1.0882, M6 – 1.0914.
In weekly terms, the central pivot point is at 1.0951. The three key resistance levels are as follows: R1 – 1.1077, R2 – 1.1323, R3 – 1.1449. The three key support levels are: S1 – 1.0705, S2 – 1.0579, S3 – 1.0333.
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
