EUR/USD — Bearish Resolution Through Range POC

The heightened risk appetite seems to have encouraged the market to return into the carry trade via lower-yielding currencies the likes of the Euro and the Yen. The weakness in the former has manifested into the breakout of its multi-month range point of control circa 1.1375, which allows further downside towards 1.1345–50, an area of dual support based on the tests from late last year. The continuation of the downward pressures has the backing of a bearish 5-DMA, alongside the short-term momentum in the German vs US bond yield spread. Even if the macro bond yield spread divergence is still present for all to see, there is no price action evidence that suggests the market is looking to turn around as of today, hence one must be cautious.