EUR / USD climbs back above 1.1900 on Powell’s dovish comment

• EUR / USD is back above its 200 DMA 1.1900 level following dovish comments from Fed Chairman Powell
• Powell pointed to the slowness of global vaccines and the increase in cases in the US as risks to the near-term outlook.

The EUR/USD Currently trading near the day’s highs around the 1.1900 level, the pair managed to aggressively recover the large figure and jumped north of its 200-day moving average at 1.1883 in recent trade. With the pair now convincingly rebounding to 1.1900, medium-term bulls will be on the lookout for a gradual move towards the 50 DMA at 1.1974 and the mid-March double top at 1.1990 just above it. On the day, the EUR / USD is trading with gains of just under 60 pips or around 0.5%.

Performance of the day

The euro has benefited from widespread USD weakness on Thursday and is somewhere near the middle of the G10 performance chart for the day. That implies that the main driver for the EUR / USD has been on the dollar side of the equation, not on the euro side. In fact, there hasn’t been much to update regarding the euro zone, apart from the ECB speech and the release of the minutes of the March ECB meeting; Regarding the latter, as expected, the tone of the Minutes was very moderate, and the members of the ECB agreed that it is important to provide guarantees that the governing council will maintain highly accommodative monetary policy conditions for as long as necessary. and you see no risk of overheating. Turning to the ECB’s speech, ECB President Christine Lagarde noted that the pandemic and related containment measures will continue to have a negative impact on economic activity in the euro zone in the short term, but that activity should recover later in the year. year. The ECB’s chief economist, Philip Lane, reiterated that favorable financial conditions should be maintained. The ECB’s Klass Knot said he expects the pace of asset purchases under the PEPP to slow down by June.

Looking ahead, the main event that US dollar traders should watch out for for the rest of the week is Friday’s producer price inflation report for the month of March. Meanwhile, euro traders will be on the lookout for comments from ECB Vice President Luis de Guindos at 08:30 BST on Friday. Otherwise, the EUR / USD is likely to continue to trade based on bond yield spreads and the state of the pandemic on both sides of the Atlantic.

Technical levels