- The EUR/USD pair advances to the 1.0870 zone early on Wednesday.
- The dollar remains offered against a backdrop of rising US yields.
- The ECB’s words keep the pair in positive territory.
The pair EUR/USD is clinging to gains around the 1.0850 zone against the backdrop of dollar strength on Wednesday.
EUR/USD: Weekly gains look capped near 1.0870
The EUR/USD pair is trading within a familiar range, modestly higher towards 1.0850, against the backdrop of a moderate dollar rebound.
The improved tone of the European currency seems underpinned by comments from ECB rate setters. Indeed, ECB Council Member Kazimir suggested that core inflation could play a key role in interest rate decisions, while leaving the door open for further rate hikes, albeit at a slower pace. Slower. In addition, member Lane defended further rate hikes and suggested that inflation in the region could decline rapidly by the end of the year.
On the euro calendar, GfK consumer confidence in Germany improved slightly to -29.5 in April (from -30.6), while French consumer confidence eased to 81 in March (from 82).
In the US, MBA mortgage applications increased 2.9% in the week to March 24 and Pending Home Sales will be released later.
What to expect around the EUR
EUR/USD weekly rally runs into initial resistance near 1.0870 amid resumption of some USD buying.
Meanwhile, the evolution of the prices of the European currency should closely follow the dynamics of the dollar, as well as the possible next movements of the ECB in a context still dominated by high inflation, although with diminishing recession risks for the moment. .
For now, the pair is gaining 0.04% at 1.0846 and a break above 1.0929 (March 23 monthly high) would target 1.1032 (Feb 2 high) en route to 1.1100 (round level). On the downside, the next support is at 1.0712 (March 24 low), followed by 1.0637 (100-day SMA) and finally 1.0516 (March 15 monthly low).
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.