- EUR / USD remains stagnant at the 1.2150 region on Thursday.
- The ECB will publish the minutes of the December meeting.
- Initial weekly jobless claims and Powell’s speech will dictate sentiment at the start of the American session.
Common currency extends consolidation and motivates EUR / USD to remain stable near 1.2150 region in the second half of the week.
EUR / USD seems supported near 1.2130
The EUR / USD remains under slight pressure at the lower limit of the weekly range established near 1.2130, in the context of some consolidation in the currency markets.
Indeed, benchmark 10-year US bond yields appear to have hit a stiff hurdle in the 1.18% area (Tuesday), triggering a corrective slide shortly after. Further, market participants continue to assess the recent dovish tone of some ECB members.
It is worth remembering that C. Lagarde, President of the ECB, said on Wednesday that the central bank is closely monitoring the performance of the exchange rate and, in particular, its impact on inflation in the region.
Regarding economic data, the ECB will release the minutes of the last monetary policy meeting in December. On the other hand, initial jobless claims and Fed chair J. Powell’s participation in an event will be in the limelight across the Atlantic.
What can we expect around the EUR?
EUR / USD bullish momentum petered out at the 1.2350 region earlier in the month. Despite the downward correction, the outlook for EUR / USD remains constructive and appears supported by prospects for a strong recovery in the region (and abroad), which in turn is underpinned by additional fiscal stimulus. by the Fed and the ECB. Furthermore, real interest rates continue to favor the euro area versus the US, which is also another factor supporting the common currency.
EUR / USD levels
At the time of writing, the EUR / USD pair is shedding 0.05% on the day, trading at 1.2150. The next support is at 1.2132 (Jan 11 low), followed by 1.2058 (Dec 9, 2020 low) and 1.2032 (23.6% Fibonacci retracement of the 2017-2018 move). On the other hand, a breakout above 1.2349 (January 6 high) would target 1.2413 (April 17, 2018 high) on its way to 1.2476 (March 27, 2018 high).
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