- EUR/USD moderated earlier rally to 1.0940 area.
- ECB members see a likely rate hike in July.
- Chairman Powell speaks later about the global economy.
After the previous rally to fresh 2-week highs in the 1.0935/40 band, the EUR/USD is under slight downward pressure and is now back in the area below 1.0900 on Thursday.
EUR/USD now looks at Powell
EUR/USD keeps supply bias unchanged so far this week and continues to rebound from Monday’s sub-1.0800 levels amid persistent dollar downside correction.
The pair’s further rally comes amid equally positive performance from US and German yields, which manage well to regain bullish traction and reverse Wednesday’s pullback.
Earlier in the Euro Docked, inflation figures in the broader Eurozone were slightly below preliminary impressions for the month of March, while the European Commission’s Preliminary Consumer Confidence is due out later in the day.
On the US calendar, initial claims increased by 184,000 in the week to April 16 and the Philadelphia Fed Manufacturing Index moderated to 17.6 in April (from 27.4). Later in the American session, Chairman Powell will speak on the global economy at an IMF event.
What to look for around EUR
EUR/USD regains some composure and breaks through the 1.0900 level to lock in fresh multi-day highs. However, the duration and extent of the ongoing bounce remains to be seen, as the outlook for the pair remains tilted to the downside, always in response to dollar dynamics, geopolitical concerns and the divergence between the Fed and the ECB. As usual, occasional pockets of strength in the single currency should be bolstered by speculation that the ECB could raise rates before the end of the year, while higher German yields, elevated inflation, decent pace of economic recovery and encouraging results from key fundamentals in the region also support a rally in the euro.
Technical levels
So far the pair is up 0.40% at 1.0893 and faces the next upside barrier at 1.0936 (weekly high Apr 21), followed by 1.1000 (round level) and finally 1.1078 (55-day SMA). On the other hand, break below 1.0757 (14 Apr 2022 low) would target 1.0727 (24 Apr 2020 low) on the way to 1.0635 (23 Mar 2020 low).
Source: Fx Street
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