EUR/USD back below 1.0900 as a rising wedge targets 1.0700 despite hawkish ECB minutes
|- The EUR/USD slides during the North American session, some 0.09%.
- ECB minutes lifted the EUR/USD above 1.0900, but a risk-off sentiment and Fed’s minutes dragged the pair under the former.
- EUR/USD Price Forecast: The break of a rising wedge opened the door towards 1.0700.
The shared currency is almost flat in the North American session after reaching a daily high at 1.0938, courtesy of hawkish than expected European Central Bank (ECB) March meeting minutes, despite broad risk aversion in the market. Nevertheless, of late, the EUR/USD dipped below the 1.0900 mark and is trading at 1.0879 at the time of writing.
ECB minutes perceived as hawkish
On Thursday, the ECB unveiled its March 10 minutes. The Governing Council (GC) said that it could afford to be patient, with measures of long-term inflation expectations at around 2%. Regarding the Ukraine-Russia War, the GC added that the initial effects of the war on the EU economy would be upwards on inflation and downwards on economic growth and noted that it could have inflationary/disinflationary impacts in the longer term.
Concerning inflation, a large number of ECB members noted that inflation is high and persistent, so-called for immediate further steps toward monetary policy normalization.
The EUR/USD reacted upwards on the release. However, a dismal market sentiment courtesy of the continuation of the Russia-Ukraine war, and Wednesday’s hawkish Federal Reserve minutes, exerted downward pressure on the common currency, dragging the pair back under the 1.0900 mark.
The EU economic docket revealed Retail Sales for February. The monthly reading expanded by 0.3%, at a slower pace than the 0.6% estimated. But, the year-over-year figure rose by 5%, higher than the 4.8% foreseen though trailed by January’s 8.4% increase.
The US docket revealed Initial Jobless Claims for the week ending on April 2, which came at 166K less than the 200K expected.
EUR/USD Price Forecast: Technical outlook
The EUR/USD bias remains downwards and further cemented it when on April 4, the EUR/USD broke the upslope trendline of a rising wedge, which opened the door towards 1.0700, but first would need to overcome some hurdles on its way down.
The EUR/USD first support would be 1.0848. A breach of the latter would expose the 2022 YTD low at 1.0806, followed by April 2020 swing lows around 1.0727, and then the abovementioned 1.0700 mark.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.