EUR/USD rebounds but again fails near 1.2300

• Spot recovery limited as USD slide hits support. 
• US yields at multi-year highs and US stocks down more than 1%. 

After the beginning of the US session, the greenback lost strength across the board and favored the rebound in EUR/USD. The pair bottomed earlier at 1.2211, the lowest level in three weeks and then rebounded. It climbed to test daily highs near 1.2300 but failed to break above 1.2295 and pulled back. It was trading at 1.2250/60, practically unchanged from yesterday’s close.

The euro is lagging affected by the decline in EUR/GBP and EUR/CHF. The pound jumped after the Bank of England statement while the Swiss franc accelerated to the upside during the last hours. Both crosses limited the upside of the euro versus the US dollar. 

In Wall Street equity prices are falling sharply with the Dow Jones is down 1.40% or 370 points. Main European markets ended with losses of more than 1%. In the bond market, US and European yields were higher. The US 10-year is back above 2.85% near multi-year highs. 

EUR/USD levels to watch 

To the upside, resistance levels are seen at 1.2295 (Feb8 high), 1.2345 and 1.2265/70. On the flip side, the 1.2210 area (Jan 22 & Feb 8 low) is the immediate barrier, a break lower would expose 1.2200. Below, support might lie at 1.2160 and 1.2085 (Jan 04 high).