EUR/USD: Building Lower Lows Despite Not Yield Backing

A resolution of the 20p price jam, what I usually refer to as a balance area, has finally transpired. Sellers came in with conviction to create an impulsive breakout which has resulted in a new bearish cycle low. The fall in the exchange rate allows us to draw a new descending trendline, while it proves that we are at a stage where the market seems more concerned on adjusting the EUR valuation lower on the back of recessionary fears in Germany, than taking as guidance the uptrending 10y German vs US bond yields spread, as the negative micro correlation clearly demonstrates. At the bare minimum, the disadvantageous position by the USD when it comes to capital flows should make it harder for the exchange rate to go through episodes of sustainable selloffs as the lower value is not justified. Still, make the technical your number 1 guidance here until evidence of yield spreads playing a greater role again. The double distribution down in the volume profile communicates any rebound represents potential sell side opportunities given the concentrated volume above 1.13 caught wrong-sided.