EUR/USD retreats from daily tops around 1.1340s cling to 1.1300

The shared currency drops sharply during the New York session, down 0.08%, trading around the 1.1300s at the time of writing. In the last couple of hours, the market sentiment has been mixed. European stock indices finished the session in red, contrarily of rising US indices across the pond. The NZD and the GBP are the leading gainers in the FX market, while the rest of the G8 peers print modest losses. 

The EUR/USD tries to break under the 1.1300 figure for the second time, as the USD seems to benefit from higher US bond yields, rising from the short-term until the long-maturity ones. The US 10-year Treasury yield, one of the barometers for rates, edges up two and a half basis points, sitting at 1.46%, amid a group of Fed speakers crossing the wires. In the meantime, the US Dollar Index, which tracks the greenback’s performance against a basket of six rivals, advances 0.11%, reclaiming the 96 handle, sitting at 96.13.

Fed’s Bostic and Daly aims for a faster bond taper, Barkin would rather keep the current pace

Atlanta Fed President Raphael Bostic said, “The longer we have higher inflation, the greater the risk.” Further added that he will push for ending QE taper sooner than later and aim to finalize it by the first quarter of 2022. Additionally, Bostic commented that if inflation stays elevated at around 4% in the next year, that would be a good case of pulling forward interest rate hikes.

In the same tone, San Francisco Fed President Mary Daly said that the “Fed may need to start crafting a plan to think about raising interest rates.”

Meanwhile, Richmond Fed President Thomas Barkin said that he is supporting the pace of the bond tapering, Further added that long-term inflation expectations are always a concern.

EUR/USD Price Forecast: Technical outlook

The daily chart of the EUR/USD depicts the pair has a downward bias. The simple moving averages (SMA’s) with a downslope reside above the spot price, confirming the bearish bias. Also, in the last three days, the EUR/USD has found strong resistance lying around 1.1340s, causing a retracement on the pair, down to 1.1300. 

In the outcome of breaking under 1.1300, the first support would be the November 30 low at 1.1235. The breach of the latter would expose the year-to-date low at 1.1186.

On the other hand, the EUR/USD first resistance would be the November 30 swing high at 1.1382, immediately followed by 1.1400. A break above that level could pave the way for further gains. The following resistance would be 1.1459, followed by the 50-SMA at 1.1507.