EUR/USD maintains the buying bias above 1.0800

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  • EUR/USD hits an initial hurdle near 1.0840 on Thursday.
  • ECB accounts showed that its members were initially in favor of a 75 basis point rate hike.
  • The US Philly Fed index improved to -8.9 in January.

Bulls continue to control sentiment around the single currency, and the EUR/USD posts decent gains above 1.0800 as the European session draws to a close on Thursday.

EUR/USD: Limited weekly performance near 1.0890

EUR/USD adds to Wednesday’s small advance and manages well to hold above 1.0800 so far on Thursday.

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In fact, the selling interest around the dollar allows the continuation of the improvement in the risk complex and helps with the bullish bias of the pair, while the hawkish speech of the ECB also supports the north march of the pair.

From the ECB, the accounts of the last meeting showed an initial attempt to raise rates of 75 basis points and some participants advocated a faster reduction of the APP.

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On the US calendar, building permits contracted 1.6%m/m in December and home construction starts contracted 1.4%m/m. In addition, initial grant applications rose 190,000 in the week to January 14 and the Philadelphia Fed’s manufacturing index improved to -8.9 for the current month.

What to expect from the EUR

EUR/USD rebounds from recent lows in the 1.0770/65 area and manages to recover to 1.0800 and beyond amid improving sentiment in the risk space.

The price action around the European currency should closely follow the dynamics of the dollar, as well as the impact of the energy crisis on the euro block and the divergence between the Fed and the ECB.

Returning to the euro zone, the growing speculation about a possible recession in the bloc emerges as a major domestic headwind facing the euro in the near term.

technical levels

For now, the pair gains 0.25% at 1.0821 and faces the next bullish barrier at 1.0887 (18 Jan monthly high), followed by 1.0900 (round level) and finally 1.0936 (April 21 weekly high). of 2022). On the flip side, the break of 1.0766 (weekly low Jan 17) would target 1.0513 (55-day SMA) en route to 1.0481 (monthly low Jan 6).

Source: Fx Street

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