- EUR/USD loses control further and retests 1.1000.
- The ECB’s Lagarde said the economy would grow strongly in 2022.
- US headline CPI rose 7.9% yoy, core CPI rose 6.4%.
The EUR/USD accelerates losses and revisits the 1.1000 area after the moderate recovery in the demand for the dollar.
EUR/USD retraces rally to 1.1120 area
Following the initial rally to multi-day highs in the 1.1120/25 area, EUR/USD came under some selling pressure and is now revisiting key support at 1.1000.
In fact, EUR/USD lost more ground after chief Lagarde suggested that inflation in the region looks considerably higher on the short-term horizon, adding that long-term inflation expectations are now anchored again in the target level. However, consumer prices are expected to decline under all scenarios, Lagarde added.
Lagarde also blamed energy as the main factor behind elevated inflation, while pointing out that food prices could also face upward pressure.
As for the normalization of monetary conditions, Lagarde ruled out any acceleration of the process, preferring instead a gradual approach.
Meanwhile, in the US, CPI tracked inflation rose in line with expectations by 7.9% yoy in February, while core CPI rose 6.4% from a year earlier.
Technical levels
So far, the pair is down 0.54% at 1.1014 and faces the next upside barrier at 1.1121 (10 Mar weekly high), followed by 1.1192 (20-day SMA) and finally 1.1285 (55-day SMA). On the other hand, a drop below 1.0805 (March 7, 2022 low) would target 1.0766 (May 7, 2020 monthly low) on track to 1.0727 (April 24, 2020 monthly low).
Source: Fx Street
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