- EUR/USD has snapped its longest weekly losing streak in 14 months.
- Comments by ECB’s Lane have so far failed to put a bid under the EUR.
- The pair remains trapped in a bearish channel.
EUR/USD eked out 0.61% gains last week, ending a four-week losing streak, which was the longest since November 2018.
Buyers struggle for follow-through
The preceding week’s solid gain has so far failed to invite stronger buying pressure. The pair is currently trading at 1.1080, representing a 0.12% drop on the day, having faced rejection at 1.1095 during the Asian trading hours.
European Central Bank’s (ECB) chief economist Philip Lane said on Sunday that there cannot be a permanent disconnect between labor costs and prices and the rising labor costs will eventually reignite inflation. Lane added further that the central bank is on track toward its 2% inflation goal.
Even so, the single currency is struggling to extend Friday’s 0.58% rise.
Downward trajectory intact
The pair is still trapped in a bearish channel as represented by the trendlines connecting Dec. 31 and Jan. 16 highs and Oct. 1 and Jan. 28 lows.
A channel breakout is needed to confirm a bullish reversal and expose the Jan. 16 high of 1.1173.
The breakout will likely remain elusive if the US ISM Manufacturing PMI (Jan), due at 14:45 GMT, betters estimates by a big margin. The pair may also take cues from the final German and Eurozone PMI numbers for January and speech by ECB’s De Guindos and German Bundesbank’s Weidmann.
Technical levels
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