Key Points
- EUR/USD closes at 1.13681, up 0.81%, after hitting a high of 1.13922.
- Dollar weakness intensifies as USDX falls 0.8% to 99.4290, touching fresh multi-month lows.
- Nvidia’s $5.5 billion warning spooks markets; STOXX 600 down 1.3%, DAX down 1.1%, FTSE 100 down 0.8%.
The euro extended its rally on Wednesday, as traders fled the U.S. dollar amid worsening cross-border tensions, corporate volatility in tech, and mounting doubts about U.S. policy consistency.
The euro’s ascent was amplified by a broader dollar selloff, with the USDX Index falling 0.8% to 99.4290—marking its lowest level since July 2023. Jefferies economist Mohit Kumar noted that traders are beginning to question the dollar’s exceptionalism and long-term credibility as a reserve currency, especially as erratic tariff policies dent U.S. credibility.
President Trump’s decision to block Nvidia’s chip exports to China—resulting in a $5.5 billion revenue hit—triggered a rout in semiconductor stocks globally and exacerbated trade concerns. Nvidia shares plummeted, dragging peers like ASML Holding (–6%), ASM International, and BE Semiconductor lower in Europe. The STOXX 600 dropped 1.3%, while the DAX and FTSE 100 fell 1.1% and 0.8%, respectively.
Bond Yields Steady as Risk Assets Retreat
Despite the equity fallout, U.S. Treasuries stabilised, with the 10-year yield dipping slightly to 4.302%. The 2-year yield fell to 3.793%, and the 30-year slid to 4.762%. In Europe, Bund yields declined, with the German 10-year yield falling 5.5 basis points to 2.488%, as demand for safer assets returned.
In Asia, tech-led declines dragged the Nikkei and Kospi down by 1% and 1.2%, respectively. Hong Kong’s Hang Seng Index fell 1.7%, while the Hang Seng Tech Index dropped 3.3%, reflecting the broad global unease over semiconductor trade restrictions.
Technical Analysis
EURUSD has staged a strong intraday reversal, rebounding sharply from the 1.12641 low early on April 16 and climbing steadily into 1.13681 by session close. The move is backed by a clean bullish alignment across the 5, 10, and 30-period moving averages, with the 5MA crossing above the 30MA around the 1.13000 level—marking the shift in short-term sentiment.
Picture: Bullish momentum holds as EURUSD eyes continuation above recent high, as seen on the VT Markets app
Momentum is confirmed by the MACD, which has shown an extended bullish phase with histogram bars consistently green and widening MACD lines. However, a slight narrowing of the MACD near the end of the chart suggests some potential for consolidation or pullback after the push to the high of 1.13922.
Key support now lies at 1.13400, with resistance near the 1.13900–1.14000 zone. A clean break above could open up a run toward 1.1440, while a dip back below 1.1340 might signal a fade toward the 1.1300 handle.
