EUR/USD rises from weekly lows to highest in three days above 1.0030
- US dollar reverses late on Friday and turns negative.
- US yields off highs following the Consumer Sentiment report.
- EUR/USD is about to end the week with minor changes.
The EUR/USD rose from 0.9970 and climbed to 1.0035, hitting the highest level since Tuesday amid a reversal of the US dollar across the board following University of Michigan's Consumer Sentiment report.
On European hours, the EUR/USD hit the lowest level in a week under 0.9950 and a few hours later printed a multi-day high, driven by a weaker dollar, affected by UoM Consumer Sentiment. The main index rose to 59.2, below the 60 of market consensus. The key numbers were inflation expectations that dropped across the curve.
The key event ahead is the FOMC decision on Wednesday. A 75 basis points rate hike is expected. The decision, the dot plot and the tone of the Fed will likely determine the next direction of the EUR/USD.
"Narrative shattered – US inflation is unrelenting, throwing the "Fed pivot" story up in the air and boosting the dollar. Europe's efforts to mitigate the energy crisis were insufficient to withstand the greenback's strength. All eyes are now on the world's most important central bank, with everything else playing second fiddle," said Yohay Elay, analyst at FXStreet.
EUR/USD weekly chart
The EUR/USD is about to end the week flat. The trend in the pair is clearly bearish, but so far, it has been able to remain above 0.9850/0.9900. If the euro manages to post a close above 1.0070, it could alleviate the negative pressure. The following level is the 1.0300 area that contains the 20-week moving average. On the flip side, support is located at 0.9910, followed by 0.9860 and 0.9730.
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Technical levels
Author
Matías Salord
FXStreet
Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.
