EUR/USD remains steady around 1.1350 ahead of ECB’s Lagarde, Fed’s Powell
- EUR/USD treads water after consolidating recent losses in early Asia.
- Fed’s Powell pledges to stop higher inflation from getting entrenched, virus woes worsen.
- Eurozone Sentix Investor Confidence jumped, Unemployment Rate eased.
- Tepid sentiment weigh on the USD as traders await speech from ECB’s Lagarde, Powell’s Testimony.
EUR/USD holds onto the early Asian session gains, taking rounds to 1.1350 ahead of Tuesday’s European session.
The pair buyers seem to track cautious optimism in the market, as well as recently firmer Eurozone data, to consolidate the previous day’s losses. Though, traders remain cautious ahead of a speech from the European Central Bank (ECB) President Christine Lagarde and a testimony from US Federal Reserve (Fed) Chairman Jerome Powell.
Hawkish comments from Fed Chair Jerome Powell, per the prepared remarks for today’s Testimony, join update on Merck’s covid treatment, to favor the risk-on mood of late.
The Fed Boss said, “The economy is growing at its fastest rate in years, and the labor market is robust.” However, his pledge to stop higher inflation from getting entrenched keeps the rate hike concerns on the table and weighs on the sentiment. It’s worth noting that comments from Merck’s official saying, “Expect Molnupiravir mechanism to work against omicron, any covid variant,” could be cited as positive for the risk appetite.
It’s worth noting that Eurozone’s investor sentiment unexpectedly improved in the first month of 2022, the latest data published by the Sentix research group showed on Monday. On the same line was the Eurozone Unemployment Rate of 7.2% for November versus 7.3% prior.
Alternatively, increasing chatters of Fed’s rate hike and a fresh record top of daily covid infections in the US challenges the EUR/USD pair buyers.
That said, the EUR/USD prices are likely to stay range-bound ahead of the week’s key events/data. Meanwhile, risk barometers may direct short-term pair moves.
Against this backdrop, the US 10-year Treasury yields dropped 1.5 basis points (bps) to 1.757% after rallying to January 2020 levels during the previous day, before closing in negative on D1. Further, the 2-year bond coupons remain steady around March 2020 levels, near 0.90% at the latest. Additionally, S&P 500 Futures print 0.07% intraday gains while stocks in the Asia-Pacific region trade mixed by the press time.
Although ECB’s Lagarde is likely to reiterate her cautious optimism, a major attention will be given to Fed’s Powell as the monthly Consumer Price Index (CPI) data looms for publishing on Wednesday.
Read: US Consumer Price Index December Preview: The Fed’s die is cast
Technical analysis
EUR/USD keeps the corrective pullback from an upward sloping support line from November 24 and the 200-SMA, respectively around 1.1300 and 1.1280.
Given the steady RSI and firmer Momentum lines, the latest rebound is likely extending towards a one-week-old resistance line near 1.1360. However, any further declines will be challenged by the December-end peak near 1.1385 and the 1.1400 threshold.
Reprinted from FXStreet_id,the copyright all reserved by the original author.
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