The euro’s advance, which began from almost $1.1700 at the end of March, stalled in the $1.2245-$1.2265 band. ECB doves push against arguments in favor of reducing bond purchases. Month-end adjustments saw the euro retreat to around $1.2135 before the weekend before quickly snapping back to the $1.22 area. The first important technical test is seen at around $1.2050, the low from mid-May and the (38.2%) retracement objective of the rally from that March low.
A convincing break could spark a test on the $1.1975-$1.2000 area, where the (50%) retracement and 200-day moving averages are found. The MACD is turning down from the highs for the year. However, the Slow Stochastic did not confirm the new high in prices and is curled lower, leaving a bearish divergence in its wake.
The dollar pushed above JPY110 ahead of the weekend for the first time since April 6 but quickly sold off as the US 10-year yield fell back below 1.60% again. A…