|

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 price1.1296
Today Daily Change0.0017
Today Daily Change %0.15%
Today daily open1.1279
 
Trends
Daily SMA201.1401
Daily SMA501.1533
Daily SMA1001.1663
Daily SMA2001.1833
 
Levels
Previous Daily High1.1322
Previous Daily Low1.1258
Previous Weekly High1.1324
Previous Weekly Low1.1186
Previous Monthly High1.1692
Previous Monthly Low1.1524
Daily Fibonacci 38.2%1.1283
Daily Fibonacci 61.8%1.1298
Daily Pivot Point S11.1251
Daily Pivot Point S21.1223
Daily Pivot Point S31.1187
Daily Pivot Point R11.1315
Daily Pivot Point R21.1351
Daily Pivot Point R31.1379

Author

Anil Panchal

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.

More from Anil Panchal
Share:

Editor's Picks

GBP/USD defends 1.3300 after strong UK PMI data

Following Thursday's sharp decline, GBP/USD clings to small gains above 1.3300 in the American session on Friday, supported by the upbeat UK Retail Sales and July PMI data. Nevertheless, the pair's upside remains capped as investors cling to a cautious stance amid a further escalation of tensions in the Middle East. The US July PMI data failed to trigger relevant price action.

EUR/USD remains below 1.1400 after mixed US PMIs

EUR/USD pressures daily lows below the 1.1400 mark in the American session on Friday. Mixed S&P Global PMIs, as manufacturing output contracted while services activity expanded in July, triggered no relevant market reaction. The focus remains in Middle East developments and inflation-related concerns.

Gold holds above $4,050 but momentum still missing

Gold builds on its modest intraday bounce and climbs above the $4,050 level on Friday, hitting a fresh daily high amid a modest US Dollar pullback. The fundamental backdrop, however, warrants some caution before confirming that the pullback from an over two-week high, touched on Wednesday, has run its course and positioning for any meaningful upside.

Ethereum: Derivatives interest in ETH improves, but signs of caution remain

Ethereum is hovering slightly below the $1,900 level, down 3% on Thursday following a slight expansion in derivatives interest. The top altcoin's open interest has increased to 14.60 million ETH, marking a 600K ETH increase over the past two days and its highest level since June 7.

XRP retreats as ETF interest cools
Ripple (XRP) slides toward the short-term $1.10 support on Friday, as broader crypto market sentiment weighs on crypto assets. The sell-off mainly stems from fears of inflation in the United States (US) amid the ongoing war in the Middle East and rising Oil prices.
US Dollar mid-year outlook: Exceptional currency, exceptional risks?
The US Dollar enters the second half of 2026 in a markedly different position from a year ago. The King currency has recovered, reflecting persistent US inflation, changing expectations for Fed policy, geopolitical tensions and renewed demand for defensive assets.