EUR/USD intermarkets: EUR supported by German yields

The single currency has managed to grab some buying interest during the European morning, clinching the area of session highs near 1.1140 after briefly testing the critical support area around 1.1100 the figure, home of the key 200-day sma.

Bunds doing the heavy lifting, USD losing strength

A better tone in the German money market keeps propping up the upside momentum in EUR, with the lower end of the Bunds yield curve – 2y and 5y – steepening further as the session is under way and ahead of key advanced CPI figures in Germany for the current month.

Supporting the pair’s upside fashion, the greenback – when tracked by the US Dollar Index (DXY) - seems to have lost vigour, receding from overnight tops amidst low volatility and nil activity in the US markets due to the Memorial Day holiday. It is worth mentioning that the greenback got extra wings from Friday’s comments b Chief J.Yellen, keeping the likeliness of a rate hike in June/July well and sound.

The extent of the current bullish attempt remains under scrutiny however, as expectations of a rate hike by the Fed at some point later in the year remain high.