EUR/USD struggles below 1.2200 as taper tantrum seeks acceptance

EUR/USD portrays a sluggish start to the week.
Fedspeak highlights reflation fears, backs the need for tapering talks.
Vaccine optimism battle virus strain fears amid upbeat economics.
Second-tier US data, Fed’s Brainard awaited for fresh impulse, risk-aversion can favor sellers.

Anil Panchal FXStreet

EUR/USD looks for fresh clues while portraying a dormant day around 1.2180, heading into Monday’s European session. The currency major pair dropped the previous day as the market’s reflation fears put a bid under the US dollar. However, the lack of major directives afterward keeps traders troubling amid a quiet Asian session.

The fears of heating price levels could gain clues from the upbeat PMI figures, published last Friday. The same pushed some more Fed policymakers, namely Atlanta Federal Reserve President Raphael Bostic and Philadelphia Fed President Patrick Harker, to join the line of Dallas Federal Reserve Bank President Robert Kaplan and back the need of tapering talks.

Also weighing on the quote could be fears of the coronavirus (COVID-19) Indian strain as well as chatters surrounding the covid outbreak from Wuhan laboratory, not to forget Belarus plane hijack.

Alternatively, comparatively lesser prices pressure on the European side and recent welcome economics join faster vaccinations to tame the EUR/USD bears of late.

Amid these plays, market sentiment dwindles as the US 10-year Treasury yields seesaw around 1.62% whereas S&P 500 Futures rise 0.30% intraday by the press time. Also printing the pair traders’ indecision is the US dollar index (DXY) that struggles to keep Friday’s bounce off early January lows around the 90.00 threshold.

Given the uncertainty over the US Federal Reserve’s (Fed) next moves, each incoming data will be the key for the EUR/USD traders, not to forget comments from the Fed policymakers. Hence, today’s speech of Fed Governor Lael Brainard and the Chicago Fed National Activity Index for April, prior +1.7, will be important to determine the pair’s near-term moves.

Should more of the Fed policymakers push for tapering talks, the rush to risk-safety can provide the much-needed pullback to the EUR/USD prices.

Technical analysis

The 1.2120-15 area, comprising 100-SMA and support line of the monthly rising wedge bearish formation, becomes the crucial level to watch. Meanwhile, corrective pullback needs to cross the previous support line from May 13, around 1.2215, before challenging the stated wedge’s upper boundary close to 1.2265.

Additional important levels

Overview
Today last price	1.2178
Today Daily Change	-2 pips
Today Daily Change %	-0.02%
Today daily open	1.218

Trends
Daily SMA20	1.2115
Daily SMA50	1.1984
Daily SMA100	1.2042
Daily SMA200	1.1968

Levels
Previous Daily High	1.224
Previous Daily Low	1.2161
Previous Weekly High	1.2245
Previous Weekly Low	1.2126
Previous Monthly High	1.215
Previous Monthly Low	1.1713
Daily Fibonacci 38.2%	1.2191
Daily Fibonacci 61.8%	1.221
Daily Pivot Point S1	1.2148
Daily Pivot Point S2	1.2115
Daily Pivot Point S3	1.2069
Daily Pivot Point R1	1.2227
Daily Pivot Point R2	1.2273
Daily Pivot Point R3	1.2306

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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