EUR/USD flirting with lows, around 1.2200 handle ahead of EZ CPI

Haresh Menghani FXStreet

• Faster Fed rate hike cycle underpins USD demand.
• EUR weighed down by concerns about easing inflation.
• EZ flash CPI in focus ahead of US GDP.

Having posted a session high level of 1.2242, the EUR/USD pair met with some fresh supply and drifted into negative territory for the second consecutive session.

The new Fed Chair Jerome Powell's first congressional testimony on Tuesday, which endorsed further gradual increases in the federal funds rate, continues to underpin the US Dollar demand and has been one of the key factors behind the pair's sharp fall of around 30-35 pips from session tops.

Meanwhile, investors remained concerned about easing inflationary pressure in the Euro-zone, especially after yesterday's disappointing German CPI, which fueled expectations that the ECB’s bond-buying program could get extended beyond the September deadline and was further seen weighing on the shared currency.

Hence, today's key focus would be on the flash version of composite Euro-zone CPI print for February, due for release during the European session and would be looked upon for some immediate respite for the bulls.

From a technical perspective, the pair has now moved on the verge of breaking below an important horizontal support near the 1.2200 handle, also coinciding with 50-day SMA, which if broken decisively would confirm a near-term bearish breakdown and open room for a continuation of the pair's bearish trajectory.

Later during the early NA session, the second estimate of the US Q4 GDP growth numbers would also play a key role in determining the pair's next leg of directional move.

Technical levels to watch

A convincing break below the mentioned handle would turn the pair vulnerable to extend the downfall towards the 1.2100 handle en-route 1.2070-65 strong horizontal support.

On the flip side, any recovery attempts might now confront fresh supply near the 1.2250-55 region and subsequent up-move seems more likely to be capped at the 1.2300 handle.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

GBP/USD surges to multi-day peaks past 1.3250

GBP/USD leaves behind Friday’s small pullback and advances past 1.3250 level, or five-day highs, on Monday. Cable’s upside follows extra losses in the Greenback, while traders continue to assess the geopolitical front and upcoming key events.

EUR/USD picks up extra pace north of 1.1400

EUR/USD extends its recovery past 1.1400 the figure as the NA session draws to a close on Monday. Indeed, the pair advances for the third straight day amid the persistent offered bias in the US Dollar. Meanwhile, market participants keep gearing up for the ECB Forum in Sintra and the release of critical US labour market data.

Gold bears flirt with $4,000 as Iran tensions and Fed hike bets support USD

Gold remains under some selling pressure for the second straight day on Tuesday, with bears awaiting a sustained break below $4,000 before positioning for deeper losses. Renewed US-Iran hostilities over the weekend cast doubts over the sustainability of the peace deal. This, along with elevated expectations for Fed rate hikes, offers some support to the US Dollar and keeps the bullion within striking distance of the YTD low, touched last week.

Bitcoin stalls at $60K as buyer conviction fades, Strategy authorizes BTC sales

Bitcoin is trading around the $60,000 level on Monday after a sharp decline last week. With the top crypto struggling to recover, analysts suggest the market remains firmly in defensive territory as investors await stronger signs of demand.

Just like Fed, is BoJ’s independence under threat?

When talking about central bank independence, most of the focus has been on Donald Trump’s pressure on the Federal Reserve. But a similar story, a quieter one for now, seems to be happening on the other side of the Pacific: Japan’s government may be testing the Bank of Japan’s independence.

Kevin Warsh isn't expected to say much in Sintra: That's exactly why markets will listen

Financial markets could find an important catalyst in the enchanting, fairytale-like landscape of Sintra this week. The ECB Forum will, as it does every year, gather the crème de la crème of central banks. The new boss at the Fed, who has clearly said that the Fed should stop explaining everything, will need to talk – and traders should listen.