EUR/USD teases 1.1300 as yields weigh on USD, Eurozone inflation, Fed’s Powell eyed


  • EUR/USD prints mild gains amid sluggish USD, cautious ahead of key data/events.
  • Receding fears of Omicron join Powell’s prepared remarks to down bond coupons.
  • ECB policymakers shrug off rate hike concerns, highlight today's inflation numbers.
  • Fed Chair Powell’s Testimony, US CB Consumer Confidence is important too.

EUR/USD retreats from an intraday high of 1.1305 heading into Tuesday’s European session. Even so, the currency major pair prints 0.15% daily gains by the press time, reversing the previous day’s losses, as cautious optimism in the markets reduces the US dollar’s safe-haven demand.

US President Biden shrugged off the need for lockdowns while Fed Chair Jerome Powell stayed intact on his inflation view, offering notable support to risk appetite. Following that, sentiment improves as US Treasury Secretary Janet Yellen pushes Congress to overcome the US debt limit deadlock, as well as highlighting the strength of the US economy.

On the same line were global medicine suppliers’ optimism to have the vaccines for the strain and policymakers’ confidence to take quick measures to tame the Omicron breakout. Additionally keeping the market players hopeful is the current conditions of the global economies versus the initial days of the pandemic.

Amid these plays, the US Treasury yields remain pressured with the headline 10-year bond coupon down three basis points (bps) to 1.50% whereas S&P 500 Futures print mild gains at the latest.

It should be noted, however, that the comments from European Central Bank (ECB) governing council member Pablo Hernandez de Cos and Vice President Luis de Guindos keep EUR/USD buyers on the sidelines. ECB’s de Cos said, “European policymakers aim to avoid the premature tightening of the monetary policy, repeating that high inflation could be expected to be transitory, despite being stronger and more persistent than anticipated a few months ago.” On the contrary, de Guindos said, “New coronavirus variants and spread of COVID-19 cases will increase uncertainty.” Furthermore, ECB  executive board member Isabel Schnabel said on Monday, “We think that inflation peak has been reached in November.”

Hence, today’s preliminary reading of the Eurozone Consumer Price Index (CPI) for November, expected 3.7% versus 4.1% prior, will be important to watch. It’s worth pointing out that German inflation figures jumped to a record high of 6.0% the previous day.

In addition to the Eurozone CPI, US CB Consumer Confidence for November and covid updates, followed by Fed Chair Jerome Powell’s testimony, will also be crucial to watch for fresh impulse.

Read: Conference Board Consumer Confidence Preview: Spending immunity

Technical analysis

EUR/USD prices diverge from the RSI conditions since November 18, signaling further advances as the quote is yet to track the bullish momentum signals. With the bullish RSI divergence suggesting further advances of the stated currency pair, the immediate hurdle of the weekly resistance line around 1.1315 becomes imminent to be knocked down by buyers. Alternatively, pullback moves will aim for 1.1260 and 1.1230 levels before directing the EUR/USD bears to the recently flashed yearly low surrounding 1.1185.

Additional important levels

Overview
Today last price 1.1296
Today Daily Change 0.0017
Today Daily Change % 0.15%
Today daily open 1.1279
 
Trends
Daily SMA20 1.1401
Daily SMA50 1.1533
Daily SMA100 1.1663
Daily SMA200 1.1833
 
Levels
Previous Daily High 1.1322
Previous Daily Low 1.1258
Previous Weekly High 1.1324
Previous Weekly Low 1.1186
Previous Monthly High 1.1692
Previous Monthly Low 1.1524
Daily Fibonacci 38.2% 1.1283
Daily Fibonacci 61.8% 1.1298
Daily Pivot Point S1 1.1251
Daily Pivot Point S2 1.1223
Daily Pivot Point S3 1.1187
Daily Pivot Point R1 1.1315
Daily Pivot Point R2 1.1351
Daily Pivot Point R3 1.1379

 

 

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