- EUR/USD gives back initial gains to the 1.1380 region during the European session.
- The resumption of risk appetite weighs on the dollar.
- The markets’ attention remains on the conflict between Russia and Ukraine, which limits the rise of the pair.
The pair EUR/USD moves within a tight range during the European session on Friday, trading around the level of 1.1360 after setting a high earlier in the day near 1.1380.
EUR/USD between geopolitics and dollar weakness
The EUR/USD extends its lateral movement at the upper end of the weekly range, although still below the key 1.1400 barrier.
Better sentiment around perceived riskier assets continues to be supported by hopes for a diplomatic solution to the dispute between Russia and Ukraine following news of a meeting between Blinken and Lavrov sometime next week.
In the US cash markets, yields show slight recovery after recent weaknesswhile 10-year German Bund yields extend the corrective decline below 0.25%.
In the economic calendar of the euro, today the publication of the data of the current account of the euro zone and the production of the construction sector stand out.
During the American session, data on existing home sales will be released today. Also, C. Evans, C. Waller and L. Brainard, members of the FOMC, have speeches scheduled.
What to expect around the EUR
EUR/USD continues to watch the geopolitical scenario and trends in risk appetite for near-term direction. Furthermore, the improving outlook for the pair appears to be underpinned by fresh speculation of a possible ECB interest rate hike sometime later in the year, higher German yields, persistently high inflation and a decent pace in economic activity and other key fundamentals in the eurozone
EUR/USD levels
At time of writing, the EUR/USD pair is gaining 0.09% on the day, trading at 1.1368. Next resistance is found at 1.1395 (16th Feb high), followed by 1.1491 (200-week SMA) and 1.1494 (10th Feb high). On the other hand, a break below 1.1323 (low Feb 7), would target 1.1279 (low Feb 14) en route to 1.1186 (low Nov 24, 2021).
Source: Fx Street
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