The dollar edged higher in early European trade Friday, helped by rising U.S. bond yields ahead of the release of key inflation data. The Euro traded 0.1% lower at 1.2180, slipping after reaching a 5 1/2-month high of 1.2266 on Tuesday
Helping the greenback was a report by the New York Times that President Joe Biden will announce later Friday a $6 trillion budget for 2022 to ensure investments in major infrastructure, education and healthcare projects. If this manages to get through a divided Congress, it would take federal spending to its highest levels since World War II.
Yields on benchmark 10-year Treasurys climbed to around 1.62%, from around 1.58%, on debt supply risks to fund the spending, providing support for the dollar.
Last week’s downturn keeps the market pattern negative. The slide back through last Friday’s reversal leaves trade positioned to attack under 1.2130. A close under 1.2130 projects to 1.2051. Any near term rebounds will hint resistance at 1.2240. A close over 1.2244 is needed to recapture bottoming / bullish trade action.
Resistance 2 1.2240
Resistance 1 1.2220
Support 1 1.2181
Support 2 1.2158