- EUR/USD challenges weekly lows near 1.0960.
- The dollar is still offered by geopolitics, inflation.
Selling pressure continues to affect the euro and dragged the EUR/USD to the area of weekly lows around 1.0960. In the last hour, the pair has bounced higher, rising towards the 1.1000 area, although it remains well off the daily highs near 1.1040.
EUR/USD weakened by USD buying
EUR/USD came under renewed strong downward pressure following the sharp improvement in sentiment around the dollar, which was exacerbated in response to lingering geopolitical concerns coupled with resurfacing inflation jitters.
In addition, investors’ search for safety helped demand for bonds and forced yields on both sides of the Atlantic to lose some of the recent gains.
The euro zone consumer confidence index has fallen to -18.7 points in its preliminary reading for March, well below the -12.9 forecast and -8.8 in February. On the other hand, US new home sales contracted 2.0% mom in February, or 0.772 million units.
What to look for around EUR
EUR/USD is under pressure and breaks key support at the 1.1000 mark midweek. So far, the single currency’s pockets of strength should be bolstered by speculation that the ECB will start the hike cycle sometime later in the year, while higher yields in Germany, high inflation, the decent pace of the economic recovery and encouraging results from key fundamentals in the region also support a firmer euro for the time being.
technical levels
So far, the pair trades above 1.1002, down 0.23% on the day, and faces the next upside barrier at 1.1137 (weekly high Mar 17), followed by 1.1229 (55-day SMA) and finally 1.1277 (55-day SMA). 100 days). On the other hand, a drop below 1.0960 (March 22 low) would target 1.0900 (March 14 weekly low) on track to 1.0805 (March 7 low).
Source: Fx Street
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