The U.S. dollar will remain strong for at least another month, according to a Reuters poll of foreign exchange strategists, who still forecast that the currency will weaken in the longer term.
Following a spike in benchmark Treasury yields, which touched a 14-month high on Tuesday, the greenback is up about 3.5% this year, a solid revival given it started the year on the defensive.
Trillions of dollars in expected government infrastructure spending and a robust U.S. economic recovery will likely keep bond yields rising and the dollar well-supported in the near-term, forcing reassessments of bets against the currency.
Overall the EURUSD market is bearish and yesterday’s break puts trade back into a bear stance, positioned for declines to test under 1.1680. A close under 1.1680 warns for a wash towards the 1.1600 low. Any congestion trapped to the lower half of yesterday’s range will remain aligned for selloffs. A close over 1.1800 is short term bullish for a minor correction.
Resistance 2 1.1770
Resistance 1 1.1750
Support 1 1.1701
Support 2 1.1680