- EUR/USD trades around 1.0580 close to the lowest levels since March.
- ECB President Christine Lagarde stated that rates will remain restrictive for as long as necessary.
- Investors focus on upcoming economic data releases, seeking inflationary pressures in both economies.
- Cautious market sentiment and higher US Treasury yields are contributing support for the potential of the US Dollar (USD).
EUR/USD continues to move on the downward path, trading lower around 1.0580 during the early trading hours of the Asian session on Tuesday.
The pair has posted the lowest close on Monday since March despite the European Central Bank (ECB) President Christine Lagarde's statement at the European Parliament that rates will remain restrictive for as long as necessary.
However, Lagarde has also highlighted that inflation is expected to remain "too high for too long." However, the ECB faces a challenging situation, as it must carefully navigate the delicate balance between addressing inflationary pressures and not harming an uneven domestic economy in the Eurozone.
The US Dollar Index (DXY) hovers near 106.00 at the time of writing, although it's below its highest level since November. The US Dollar (USD) is maintaining its strength, partly due to cautious market sentiment and higher US Treasury yields.
The yield on the 10-year US Treasury note improved to 4.55%, a level that hasn't been observed since October 2007. The expectation of high-interest rates persisting for an extended period is rooted in the resilience of the US economy.
As per Reuters, US President Joe Biden and one of his senior advisers have issued warnings about the potential consequences of a federal government shutdown. They expressed concerns that such a shutdown could lead to widespread difficulties, including the loss of food benefits for nearly 7 million low-income women and children.
The statement indicates that there was a prior agreement between President Joe Biden and House Speaker Kevin McCarthy on government spending levels. However, it's noted that the Republican-controlled House of Representatives may attempt to pass significant budget cuts this week.
These cuts would be subject to approval by the Democratic-controlled Senate, which is expected to reject them. If both houses fail to reach an agreement on government spending, it could lead to a partial government shutdown by the following Sunday.
Investors await the release of the US Federal Reserve's (Fed) preferred inflation gauge, the Core Personal Consumption Expenditures (PCE) Price Index, and the Eurozone’s Core Harmonized Index of Consumer Prices (HICP), which are scheduled for Friday.
These datasets may provide crucial insights into the inflationary pressures in both economies and could impact trading decisions on the EUR/USD pair.
EUR/USD: additional important levels
|Today last price||1.0584|
|Today Daily Change||-0.0009|
|Today Daily Change %||-0.08|
|Today daily open||1.0593|
|Previous Daily High||1.0656|
|Previous Daily Low||1.0575|
|Previous Weekly High||1.0737|
|Previous Weekly Low||1.0615|
|Previous Monthly High||1.1065|
|Previous Monthly Low||1.0766|
|Daily Fibonacci 38.2%||1.0606|
|Daily Fibonacci 61.8%||1.0625|
|Daily Pivot Point S1||1.056|
|Daily Pivot Point S2||1.0527|
|Daily Pivot Point S3||1.0479|
|Daily Pivot Point R1||1.0641|
|Daily Pivot Point R2||1.0689|
|Daily Pivot Point R3||1.0722|
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.