EUR/USD falters near the 1.0700 region ahead of Lagarde

EUR/USD’s upside remains limited by the 1.0700 zone.
The greenback starts the week on the back foot ad extends losses.
Producer Prices in Germany surprised to the upside in February.

Pablo Piovano FXStreet

The lack of direction in the global markets prevails in the European morning and motivates EUR/USD to alternate gains with losses near the 1.0670 region at the beginning of the week.

EUR/USD: Next on the upside comes 1.0760

EUR/USD looks to extend the positive bias seen in the second half of the last week with the immediate target at the 1.0700 neighbourhood ahead of the so far monthly peak near 1.0760 (March 15).

The inconclusive price action around the pair falls within the equally vacillating mood around the greenback and the rest of the global assets in a context where market participants remain prudent in light of the developments around the banking sector and the imminence of the FOMC gathering.

In the domestic calendar, Producer Prices in Germany contracted at a monthly 0.3% in February and rose 15.8% from a year earlier. In addition, and later in the session, ECB Chair C.Lagarde is due to speak.

Across the pond, short-term bill auctions will be the sole release later on Monday.

What to look for around EUR

EUR/USD’s intentions to extend the rebound seem to have met some resistance around the 1.0700 zone for the time being.

In the meantime, price action around the European currency should continue to closely follow dollar dynamics, as well as the potential next moves from the ECB in a context still dominated by elevated inflation, although amidst dwindling recession risks for the time being.

Key events in the euro area this week: EMU Balance of Trade, ECB Lagarde (Monday) – EMU, Germany ZEW Economic Sentiment, ECB Lagarde (Tuesday) - ECB Lagarde (Wednesday) – EMU Flash Consumer Confidence, European Council Meeting (Thursday) - European Council Meeting, EMU, Germany Flash PMIs (Friday).

Eminent issues on the back boiler: Continuation, or not, of the ECB hiking cycle. Impact of the Russia-Ukraine war on the growth prospects and inflation outlook in the region. Risks of inflation becoming entrenched.

EUR/USD levels to watch

So far, the pair is retreating 0.08% at 1.0655 and faces the next contention at 1.0516 (monthly low March 15) seconded by 1.0481 (2023 low January 6) and finally 1.0325 (200-day SMA). On the upside, a surpass of 1.0759 (monthly high March 15) would target 1.0804 (weekly high February 14) en route to 1.1032 (2023 high February 2).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

AUD/USD stays weak above 0.6900 after China’s trade data

AUD/USD struggles to capitalize on the previous day’s recovery and stays defensive on the 0.6900 level following the narrowing of trade surplus in China. Increased December Fed rate hike bets allows the US Dollar to pause its decline and weigh on the pair. US CPI data is next of note for the major.

USD/JPY retakes 158.00 on weak Japanese data; focus shifts to US CPI

USD/JPY attracts some dip-buyers and retakes 158.00 in the Asian session on Tuesday as a fall in Japan’s Household Spending offsets hawkish BoJ Summary of Opinions, undermining the Japanese Yen. Moreover, Fed hike bets support the safe-haven US Dollar and the currency pair. The market focus now shifts to the release of the crucial US CPI report.

Gold approaches $4,000 following US inflation data

Gold surrenders a big chunk of Monday’s advance and approaches the key $4,000 mark per troy ounce on Tuesday. The precious metal’s decline follows the solid performance of the US Dollar and rising US Treasury yields after US inflation figures.

Pi Network rebounds from record lows, exits oversold territory as momentum improves

Pi Network (PI) shows a strong recovery on Tuesday, up over 7% after recording its all-time low of $0.0624 the previous day. PI token’s appeal in the derivatives market shows minor improvement, with Open Interest rising to $6.21 million.

Five risks for the global economy in 2027

From AI bubbles to geopolitical breakthroughs, these are some of the five ways why this outlook could go wrong – or right: A severe correction in US stocks triggered by an AI meltdown, second-round inflation effects emerge at scale or geopolitical de-escalation delivers an energy peace dividend.

Gold reclaimed $4,100. Tuesday’s CPI test decides if it holds

Gold (XAU/USD) starts the week on a positive note, reclaiming the $4,100 psychological level as the US Dollar (USD) retreats from its recent highs. The precious metal recovers from Friday's losses, although investors remain cautious ahead of Tuesday's US Consumer Price Index (CPI) report, which could determine the next direction for Bullion.