- The EUR / USD is moving within a narrow range near 1.2130.
- German yields rose to -0.23% on Wednesday.
- All attention remains on the FOMC meeting later in the session.
The common currency alternates gains with losses and motivates the pair EUR / USD to move around the 1.2130 region during the European session on Wednesday.
EUR / USD focuses attention on the Fed
The EUR / USD pair now seems stable around 1.2130, always in the context of widespread consolidation in global markets, as investors prepare for the FOMC event that will take place during the American session.
Meanwhile, the pair pays little attention to the recovery of German 10-year benchmark yields to the -0.23% zone after a drop of about -0.30% in past sessions. Investor sentiment and pair price action continue depending largely on what happens at the FOMC event later on Wednesday.
What can we expect around the EUR?
EUR / USD manages to rebound from recent lows below the 1.2100 level, although it is expected to remain somewhat cautious ahead of Wednesday’s Fed event and as market participants continue to digest the latest US inflation figures. The common currency support, meanwhile, comes in the form of auspicious results from fundamental data on the block along with stronger sentiment, prospects for a strong rebound in economic activity, and investor appetite for higher assets perceived risk.
Eminent Background Topics: Asymmetric economic recovery in the region. Sustainability of the rebound in inflation figures. Progress of the vaccine implantation. Likely political turmoil around the EU Recovery Fund. German elections. Investor shift to European equities.
EUR / USD levels
At the time of writing, the EUR / USD pair is shedding 0.02% on the day, trading at 1.2123. A break below 1.2092 (June 11 low) would target 1.2064 (23.6% Fibonacci retracement of the November-January move) en route to 1.2051 (May 13 low). On the other hand, the next resistance is at 1.2266 (May 25 high), followed by 1.2300 (round level) and finally 1.2349 (January 6 high).
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