- EUR/USD sees fresh selling on Friday and erodes some of the previous day’s gains to a weekly high.
- The appearance of some buying around the dollar is seen as a key factor putting pressure on the pair.
- Falling US bond yields and a positive risk tone could cap dollar gains and help limit deeper losses in the pair.
The pair EUR/USD has come under fresh selling pressure on Friday and has moved away from its weekly high, around the 1.0600 level, reached on Thursday. The pair continues its intraday decline during the European session and is now trading at 1.0514, down -0.33% on the day.
The US dollar capped the post-FOMC pullback from two-decade highs and was again in demand on Friday, which in turn was seen as a key factor putting downward pressure on the EUR/USD pair. The dollar rally comes amid the expectations that the Fed will maintain its aggressive tightening policy to combat persistent inflation.
In fact, the Fed’s so-called dot plot showed the median rate projection to be 3.4% this year and 3.8% in 2023. However, investors were reassured to see that the rate will drop to 3.4% in 2024 and 2.5% in the long term, which was evident in the current fall in US Treasury bond yields.
Apart of this, signs of stability in financial markets could act as a dollar headwind and help limit deeper losses for the EUR/USD pair, At least for the moment. Market participants are now awaiting the release of the latest CPI data from the euro zone to gain further momentum ahead of Fed Chairman Jerome Powell’s speech on Friday.
EUR/USD technical levels
Source: Fx Street
With 6 years of experience, I bring to the table captivating and informative writing in the world news category. My expertise covers a range of industries, including tourism, technology, forex and stocks. From brief social media posts to in-depth articles, I am dedicated to creating compelling content for various platforms.
