- The dollar cuts losses and moves the EUR / USD away from 1.1350.
- EUR / USD remains sideways, within a dominant range.
- The focus shifts to Powell and Wednesday to inflation data.
The EUR / USD rose hours ago to 1.1351, but then undertook a retracement to 1.1325. In the preview of the American session it is at 1.1330, slightly higher for the day, continuing in the familiar range and offering calm after the sudden movements on Monday.
The dollar is falling modestly in the market. The DXY loses 0.05%, affected in part by a decline in Treasury yields. The 10-year rate yields 1.76% and the 30-year rate 2.07%. They remain close to their maximums in months and discounting prompt action by the Federal Reserve.
Bond market traders will heed Tuesday’s words from Jerome Powell, the Fed Chairman before the Senate Banking Affairs committee, in the nomination for a second term as the highest authority of the central bank. In another event Esther George, the president of the Kansas Fed will give a speech on monetary policy.
On Wednesday in the US it will be the turn of the retail inflation data, a key input for the meeting of January 25 and 26 of the FOMC. In Europe, Germany’s wholesale inflation stands out for that day.
Follow the range
EUR / USD continues to move sideways. This pattern began in late November. On the upside, the barrier to break can be located at 1.1350 / 60, while on the downside, the first support appears at 1.1270 before 1.1220. Until you get out of the lateral range, the picture will remain lateral.
On a longer-term view, Rabobank analysts expect the dollar to have the ability to push EUR / USD to the 1.10 area this year, possibly in six months if the Federal Reserve carries out its expected tightening cycle. They see a rebound in the pair in the second half of this year.
Technical levels
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