EUR/USD: Not out of the woods yet, Powell’s speech eyed for fresh impetus
The EUR/USD pair struggled to capitalize on its intraday uptick to weekly tops, or find acceptance above the 1.2100 mark and came under some renewed selling pressure on Wednesday. Investors now look forward to Fed Chair Jerome Powell’s speech for a fresh impetus.
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EUR/USD drops to 1.2050 while printing 0.10% intraday losses amid Thursday’s Asian session. The major currency pair marked an uptick to 1.2113 the previous day before taking a U-turn below 200-HMA and breaking down a horizontal hurdle, earlier support, established since February 18.
The following losses extended below 100-HMA wherein the bearish MACD signals add to the EUR/USD sellers’ hopes.
The EUR/USD pair struggled to capitalize on its intraday uptick to weekly tops, or find acceptance above the 1.2100 mark and came under some renewed selling pressure on Wednesday. A sudden pickup in the US Treasury bond yields provided a strong lift to the greenback, which, in turn, was seen as a key factor that exerted some downward pressure on the major. The US bond market has been reacting strongly to the prospects for a relatively faster US economic recovery, which has been fueling expectations for an uptick in inflation and raised doubts that the Fed would retail ultra-low interest rates for a longer period. The reflation trade was driven by the impressive pace of COVID-19 vaccinations and the progress on a massive US fiscal spending plan.
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Risk-related sentiment and reflation trade set the market’s tone this week and will likely keep driving currencies during the next one. The EUR/USD pair peaked on Thursday at 1.2242, its highest level in over a month, but trimmed gains on Friday to finish a second consecutive week unchanged just above the 1.2100 level.