EUR/USD hits two-day lows under 1.2200

• US Dollar recovers further even as the US yields held near daily lows.
• EUR/USD turns to the downside after another failure at 1.2260.

The EUR/USD dropped further during the American session and bottomed at 1.2195, hitting the lowest level in two days. As of writing it is hovering around 1.2200, still under pressure.

The recovery of the US dollar across the board pushed EUR/USD to the downside. The DXY bounced and rose to 90.05. It is up 0.35%, rising after two days of losses. The rebound from multi-month lows in DXY took place even as US yields move to the downside and as equity prices rebounded.

The 10-year yield stands at 1.55%, matching Tuesday’s three-week low. The Dow Jones rises by 0.21% and the Nasdaq by 0.65%. The rebound in equity prices did not help the euro. The common currency also pulled back toward daily lows versus the Swiss franc and the pound.

From a technical perspective, the failure of EUR/USD to break again the 1.2260 left the euro vulnerable to a bearish correction. On the downside, the next support stands at 1.2185, followed by 1.2160 (May 19 and 21 low). The immediate resistance is seen at 1.2215, followed by 1.2240, a recovery above would open the doors to a test of the 1.2260/65 area.

Technical levels