BUZZ-COMMENT-EUR/USD uptrend in doubt as mood turns cautious
May 5 (Reuters) - The EUR/USD uptrend has been technically undermined, as investor jitters over the potential for higher U.S. interest ratesdampen risk appetite and underpin demand for the dollar.
Comments from Dallas Federal Reserve President Robert Kaplan (non-voter) on Friday, suggesting the Fed should at least start to discuss tapering asset purchases , were followed on Tuesday by U.S. Treasury Secretary Janet Yellen, saying rates may have to rise to prevent the U.S. economy from overheating .
Risk assets sensitive to higher U.S. yields tumbled and pushed the dollar higher , even though Treasury yields remain contained . While Yellen later clarified her remarks , the markets remained nervous due to the realization of how investors will react when Fed Chair Jerome Powell inevitably signals the Fed will start to reel in extreme monetary stimulus.
The price action in the EUR/USD is starting to suggest a short-term top is in place at 1.2150. The 5-day moving average has crossed below the 10-day moving average - indicating momentum has shifted to the downside. A close below the 21 DMA, at 1.2011 on Wednesday, will confirm that to be the case and a fall below the 38.2 Fibonacci retracement of the March-April rise at 1.1979 would confirm a top is in place.
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(John Noonan is a Reuters market analyst. The views expressed are his own. Editing by Sonali Desai)
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