- EUR/USD reverses the initial drop and regains 1.1900.
- Final February inflation figures in Euroland come up next.
- The FOMC event will take centre stage later in the NA session.
The single currency alternates gains with losses and now motivates EUR/USD to reclaim the 1.19 level and above on Wednesday.
EUR/USD looks to Fed, data
EUR/USD now manages to reverse three consecutive daily pullbacks and rebounds from earlier lows in the vicinity of 1.1880, always following dollar dynamics and ahead of the key FOMC event due later in the NA session.
Indeed, global markets seem to have entered a pre-FOMC consolidative mood despite US yields continue to edge higher and approach the key 1.65% level when comes to the US 10-year benchmark
In the euro docket, the final CPI figures for the month of February will be the sole release on Wednesday. Across the pond, all the attention will be on the FOMC event seconded in relevance by housing results, the EIA report and weekly Mortgage Applications.
What to look for around EUR
EUR/USD met a tough resistance in the proximity of the psychological 1.20 hurdle in past sessions. The persistent solid stance in the greenback in recent weeks has put the previous constructive view in the euro under scrutiny, as market participants continue to adjust to higher US yields and the outperformance of the US economy narrative. However, the steady hand from the ECB (despite some verbal concerns) in combination with the expected rebound of the economic activity in the region in the post-pandemic stage is likely to prevent a much deeper pullback in the pair.
Key events in Euroland this week: Final February EMU CPI (Wednesday) – ECB’s Lagarde speech (Thursday).
Eminent issues on the back boiler: ECB action to curb rising European yields. EUR appreciation could trigger ECB verbal intervention, especially amidst the future context of subdued inflation. Potential political effervescence around the EU Recovery Fund. Still huge long positioning in the speculative community.
EUR/USD levels to watch
At the moment, the index is gaining 0.07% at 1.1909 and a break above 1.1989 (weekly high Mar.11) would target 1.2084 (50-say SMA) en route to 1.2113 (monthly high Mar.3). On the downside, immediate contention emerges at 1.1882 (weekly low Mar.16) seconded by 1.1837 (200-day SMA) and finally 1.1835 (2021 low Mar.9).
Share
