The EUR/USD has come under renewed pressure this Monday, as the US Dollar trades mildly higher across a basket of currencies. US Treasury bond yields continue to trade around 1-year highs, lending support to the greenback ahead of the FOMC meeting on Wednesday.
The NY Empire State Manufacturing Index came in better than expected, posting a figure of 17.4 versus the consensus of 14.6 and the previous figure of 12.1.
With a day that is light on economic data, all eyes are expected to remain in the US long-term bond yields as the primary driver of price action on the EUR/USD.
The 4-hour chart reveals the presence of a bearish flag, with price having broken below the flag with a pullback that was equally rejected at the intersection of this border and the 1.19472 resistance. This level is the price to beat for bulls. A break above this level and subsequent uncapping of the 1.19999 resistance invalidate the bearish flag.
However, another rejection reinforces the 1.19472 as a strong resistance pivot on which bears could drive the price action towards a projected objective at 1.18008. This move would need to take out the 1.18927 and 1.18395 support levels to be attained.
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