EUR/USD remains bid above 1.08

The EUR/USD leaped to its fresh seven-week high at 1.0818 during the early trading hours of the NA session amid an increasing selling pressure on the greenback. As of writing the pair is up 0.70% at 1.0813.

The steep fall in the US Treasury yields continues to weigh on the greenback, pushing the US Dollar Index towards 99.50 region. Furthermore, the fact that US equity markets are under duress amid falling oil prices creates a risk-averse environment, increasing the demand for the funding currency Euro. 

As of writing, the Dow 30 is down 0.75% while the S&P 500 is dropping 0.91%. U.S. 10-year bond yield is at 2.43% (-1.55%), just a tad above the daily low of %2.425.

Minneapolis Fed President Kashkari's comments on Twitter couldn't help the greenback limit its losses as they haven't offered anything new. Kashkari reiterated his view on the monetary policy by saying that they need to factor in lower neutral real rates and the economy is not growing nearly as fast as anyone would like, but higher rates won't help. Next in line will be FOMC member Mester's speech later during the NA session.

Technical levels

The EUR/USD is staying dangerously close to 1.0827 (Feb. 2 high/Fib. 50% of Nov/Mar fall). A follow through above this level could allow for further gains towards 1.0870 (Dec. 8 high) and 1.10 (psychological level). On the downside, 1.0720 (Mar. 20 low) is the first technical support followed by 1.0660 (50-DMA) and 1.0615 (100-DMA).

EUR/USD further upside likely – Scotiabank