- EUR/USD is back below 1.1000 after aggressive comments from the Fed and rising oil prices.
- Coming up, Fed speakers will remain in focus along with geopolitics and March flash PMIs on Thursday.
The EUR/USD has retraced to levels below 1.1000 for the second consecutive session as it was again unable to break above its 21-day moving average, which is currently sitting near 1.1050. Currently trading at 1.0980, down 0.4% on the session and pointing to a test of Tuesday’s weekly lows hit in the 1.1060 area, following the latest comments from Fed members. Cleveland Fed President Lorretta Mester, became the latest of several FOMC members to announce support for possible 50bp rate hikes at upcoming meetings and FX strategists believe the ongoing aggressive shift in market expectations for the tightening of the Fed in the coming year is providing continued support to the USD.
Energy prices have also risen amid fiery rhetoric from Russian Foreign Minister Sergey Lavrov and other signs that Russia-Ukraine peace talks are stalled, along with fears over Russian exports. This is weighing on the euro and contributing to its relative underperformance on Wednesday against most of its G10 peers. Coming up, Fed members will remain in the spotlight for the rest of the week and further aggressive trends could continue to weigh on EUR/USD, perhaps tipping it towards last week’s lows near 1.0900. The Eurozone and US Flash PMIs for March will also be in the spotlight on Thursday and will give an early insight into how the Russo-Ukrainian war has impacted business sentiment.
Technical levels
Source: Fx Street
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