EUR/USD trims losses, remains below 1.1400

  • EUR/USD bounces back after falling to 1.1370, still under pressure.
  • The dollar calms down in the market and loses ground in European hours.

EUR/USD is falling on Friday, validating part of the pullback that started on Thursday in the second half of the American session. The pair fell to 1.1369, a one-week low before bouncing back to 1.1400. The dollar lost momentum in the European session, but is still showing some strength.

The dollar, after falling to the lowest in months against the euro on Thursday, reversed direction and appreciated significantly. The comments of James Bullard, a member of the FOMC, reinforce what the US retail inflation figures had left. The yields on Treasury bonds reached their highest in months and on Friday they are moderating the rise, with the 10-year rate at 2.00%, after having reached 2.05%.

On Friday the Relevant economic data will be the Consumer Confidence Index of the University of Michigan. This is the preliminary reading for February.

In the Eurozone, in recent sessions, voices have been heard from officials of the European Central Bank, pointing out that the markets overreacted to the bank’s message, with the aim of calming the bond market. President Lagarde in an interview repeated the word “gradual” several times.

Panorama

The Thursday’s close above 1.1400 left the euro still with chances of a rebound. Weakness persisted and the pair is now testing the 1.1370/80 zone, which if given way would enable a bearish extension.

Should it recover levels above 1.1425, the Euro could regain momentum, although to clear the way for further gains it needs to break and confirm above 1.1480/1.1500.

Technical levels

Source: Fx Street

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