THE EURO FALLS AS THE US DOLLAR SURGES ON HIGH TREASURY YIELDS. REDUCED EUR/USD?

Talking Points: Euro, EUR/USD, US Dollar, Treasury Yields, USD/JPY, BoJ, Crude Oil, AUD/USD

· After the US Dollar started to strengthen again, support for the euro faded.

· As the debt markets decline, Treasury rates aim to reach new highs.

· Will the EUR/USD fall if energy prices rise over the winter in the north？

The US Dollar treasury yields shot up, while the Euro is floundering close to the 4-month low it reached overnight.

This week in the US, corporate issuance of US$ 36 billion flooded the market, depressing debt markets and increasing Treasury curve.

After looking at 4.06% last Friday, the benchmark 10-year bond moved up to 4.27% during the US session and is still there heading into Wednesday's trading day.

Masato Kanda, Japan's Vice Minister of Finance for International Affairs, the Japanese Yen managed to claw back some gains today.

He remarked, in reference to speculative FX, if these moves continue, the government needs to look for a suitable way to cob it.

Hajime Takata, who spoke shortly after him but had no impact, were brief that the bank will be patient with any monetary policy changes.

Despite slightly higher than expected GDP numbers, the Australian dollar has lagged over the past 24 hours.

Quarter-over-quarter 2Q GDP came in at 0.4%, which was in line with expectations, but the annual read the end of June, above the expected 1.8%, indicating that earlier reports had been revised upward.

After Saudi Arabia and Russia agreed to prolong their production limits through the end which reached fresh highs.

While the Brent contract is close to US$ 90 barrel, the WTI futures contract is above US$ 86.60 bbl. As this page goes to print, spot gold is stable and trading just below US$ 1,930.

The increased cost of borrowing and the rise in oil costs seemed to dampen Wall Street session, and the APAC indices largely followed.

Japan's Nikkei 225 index stands made minor gains that were attributed to the depreciating Yen, in the country's real estate market today, Chinese indices are still under pressure.

Later today, the Bank of Canada will decide on interest rates.

TECHNICAL ANALYSIS SNAPSHOT FOR EUR/USD

Yesterday, the EUR/USD fell below a number of support levels, and those levels are between 1.0665 and 1.0670. Resistance might come up ahead of the previous high near 1.0950 as the price rises.

If it were to break above there, it may see a test of potential resistance in the 1.1075 – 1.1095 area where multiple historical breakpoints sit and just ahead of 1.1100.

The breakpoint from the March 2022 high at 1.1185 or the most recent peak at 1.1275, which coincides could further upward.

Resistance could be seen at the 1.1380 Fibonacci Extension of the move from 1.1095 to 1.0635 above those levels. More breakpoints are located just above in the 1.1385–95 range.

Support on the downside can be found close to which were 1.0635 and 1.0520.

EUR/USD DAILY CHART