Share:

EUR/USD Current Price: 1.0720

  • US Federal Reserve chief Powell repeated his hawkish message, sending stocks dip into the red.
  • European policymakers focused on a 50 bps rate hike in March.
  • EUR/USD´s failed attempt to regain the 1.0750 area fuels chances of a bearish extension.

The EUR/USD pair fell to 1.0668, its lowest since early January, bouncing from the level ahead of the US close. The Euro was among the weakest US Dollar rivals, despite European policymakers repeating its hawkish rhetoric. European Central Bank (ECB) policymaker Joachim Nagel said that ECB rate cuts are not on the agenda in the foreseeable future and noted that the central bank’s rates are not yet restrictive. He added that “more significant” hikes are needed. Additionally, Isabel Schnabel, a Member of the Executive Board of the ECB, said she intends to raise rates by 50 bps in March.

The focus remained on Federal Reserve Chair Jerome Powell, as market players were still reluctant to give up on a possible rate cut from the American central bank before year-end. Chances, however, have diminished after the latest central bank meeting and the outstanding January employment report. Powell  started repeating his hawkish message, stating they would probably need to do further interest-rate increases adding that the process is going to be “bumpy.”

The market welcomed the concept delivered by Powell that stronger than anticipated data would see the Fed raising rates accordingly. The US Dollar fell as Wall Street soared, resulting in EUR/USD recovering to 1.0766. Nevertheless, he added that solid labor market reports or higher inflation reports would result in the Fed raising rates by more than what is currently priced in. The USD recovered as stocks collapsed to fresh daily lows.

Data-wise, Germany published December Industrial Production, which fell 3.1% in the month, and 3.9% from a year earlier, much worse than anticipated. The United States released the December Goods and Services Trade Balance, which posted a better-than-anticipated deficit of $67.4 billion. On Wednesday, the macroeconomic calendar will remain light, as the Euro Zone will not publish relevant data, while the United States will only share minor reports. Still, a couple of Federal Reserve speakers will be on the wires.

EUR/USD short-term technical outlook

The EUR/USD pair trades above the 1.0700 level heading into the Asian opening, as bulls seem to be losing the battle to regain control. The level stands for the 61.8% Fibonacci retracement of the 2022 yearly decline and has become a psychological barrier. The risk remains skewed to the downside, according to technical readings in the daily chart, as the pair continues to develop below a flat 20 Simple Moving Average (SMA), while the 100 and 200 SMAs currently converge in the 1.0320 price zone. Finally, technical indicators have turned flat within negative levels, short of suggesting a bulls’ comeback.

The 4-hour chart shows sellers rejected the advance around a flat 200 SMA, which stands a few pips above the aforementioned resistance level, as the 20 SMA heads south almost vertically above it. The Momentum indicator struggles for direction within negative levels, but the Relative Strength Index (RSI) has already resumed its decline, anticipating lower lows in the near term.

Support levels: 1.0660 1.0615 1.0570

Resistance levels: 1.0745 1.0790 1.0840

View Live chart for the EUR/USD 

Share: Feed news

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. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended Content


Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended Content

Editors’ Picks

AUD/USD holds positive momentum around 0.6565

AUD/USD holds positive momentum around 0.6565

AUD/USD fails to preserve its modest intraday gains amid the emergence of some USD buying. The Fed’s hawkish outlook supports elevated US bond yields and is seen underpinning the buck. A minor pullback in the equity markets further drives flows away from the risk-sensitive Aussie.

AUD/USD News

EUR/USD stabilizes above1.0800, looks to post weekly gains

EUR/USD stabilizes above1.0800, looks to post weekly gains

EUR/USD continues to trade in a tight channel above 1.0800 in the second half of the day on Friday, as the improving risk mood makes if difficult for the USD to gather strength. The pair remains on track to snap a five-week losing streak.

EUR/USD News

Gold loses ground below $2,040, US GDP data eyed

Gold loses ground below $2,040, US GDP data eyed

Gold regained its traction and stabilized above $2,020 after falling below this level during the European trading hours. The benchmark 10-year US Treasury bond yield is down nearly 1% on the day below 4.3%, allowing XAU/USD to keep its footing heading into the weekend.

Gold News

Near Protocol Price Prediction: NEAR pumps 10% as investors envision another buy opportunity here

Near Protocol Price Prediction: NEAR pumps 10% as investors envision another buy opportunity here

Near Protocol (NEAR) price is trading with a bullish bias, with a sustained series of higher highs since the last week of January. With investors groping for discounted entry points, NEAR could correct before the next leg up.

Read more

Week Ahead: What are markets watching this week?

Week Ahead: What are markets watching this week?

Following a thin economic docket last week, the final week of February will see a pick-up in data, particularly out of the US. All in all, it will be a busy week for the markets.

Read more

Majors

Cryptocurrencies

Signatures