Technical Analysis, Technical Analysis Forex
March 11, 2013 @ 9:08 am

EURUSD heavy, EURJPY upside bias

Widening bond yields spreads between the US and Europe is weighing on the EURUSD pair. The 10-year US Treasury and German Bund spreads have now widened by 55 basis points, up from 28 basis points in the last two weeks since February 25.

However the spreads between German Buds and periphery bonds like those from Italy and Spain have tightened slightly and helped prevent a worse decline in EURUSD. The pair tumbled to a 3-month low of $1.2953 on Friday, after dollar was boosted by strong US jobs data. With a further drop, the $1.2900 level is targeted. A break of the level will lead to a drop towards $1.2850.

Meanwhile Euro crosses are performing better. EURJPY is supported for now, thanks to a weaker yen, with the pair hovering at 124.90, and the bias remaining on the upside.  A rising Ichimoku cloud is helping support the euro. A break  above 125.90 could propel the pair towards 127.70, February 6 highs.

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