EUR/USD: The pair remains under pressure in the face of declining yields in Europe

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The EUR/USD pair intensified its decline this morning, breaking under the support of 1.1275, which had halted the plunge of Monday.

Remember that the Dollar has significantly benefited from the positive outcome of the meeting Trump-Xi, as well as the ISM manufacturing index higher than expected, two elements that reduce, although very modestly, expectations of a rate cut by the Fed to its next meeting at the end of the month.

The Euro had then tried to cross again the threshold of 1.13 several times yesterday, without success.

The new low 1.1268 marked this morning confirms the bearish view after the phase of hesitation yesterday.

The lower yields in Europe weighs on the Euro

As regards the reasons for the decline in the Euro this morning this is more the lower rates of State bonds in the european and the rise of the Dollar, which is to criminalise.

10-year rates are, in fact, reached new records to the decrease in France, the netherlands, Belgium and Spain. The only plausible explanation for the low yields in Europe this morning is the fact that Christine Lagarde was chosen to succeed Mario Draghi head of the ECB, investors believing without doubt that it was unlikely to be less dovish Draghi.

It should be noted that this prevents the Euro to take advantage of the PMI european higher expectations published this morning, to 53.6 points for the final estimate of the month of June, compared to 53.4 in the preliminary estimate.

Later today, several statistics that are likely to influence trade, with, in particular, the ADP report (AP:ADP) on job creation, US, and the ISM services US.

Technical thresholds to monitor short-term

From a graphical point of view, if the break under 1.1275 is confirmed, the next support that could serve as targets downside are located at 1.1250, 1.12 and 1.1180.

The increase, 1.1320 will be the first resistance to monitor, before 1.1250, then the area around the psychological threshold of 1.14.

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