• EUR/USD fades the initial spike to fresh highs near 1.1480.
  • Chairwoman Lagarde suggested inflation pressures should ease in 2022.
  • US Retail Sales surprised to the downside in December.

After climbing as high as the 1.1480 region, and new two-month highs, EUR/USD deflated and returned to the mid-1.1400s, where it is now looking to stabilize.

EUR/USD faltered ahead of 1.1500

EUR/USD sees its weekly upside momentum curtailed on the back of the so far tepid recovery in the greenback, which encouraged the US Dollar Index (DXY) to bounce off multi-week lows near 94.60, an area coincident with the 100-day SMA.

Higher US yields also appear to have been tempering the sour sentiment around the buck and sponsoring at the same time the daily rebound.

No reaction in the European currency after ECB’s Lagarde reiterated once again that inflation is predicted to ease later in the year, adding that the central bank stands ready to take any measures in order to achieve the 2% target over the medium term. She also defended the ongoing accommodative stance of the monetary policy needed to drive inflation around the bank’s goal over the midterm. More blah blah blah here.

In what was the salient event of the week, US headline Retail Sales unexpectedly shrank 1.9% MoM in December. Core sales followed the same path after contracting 2.3% MoM.

Later in the session, Industrial/Manufacturing Production, Capacity Utilization, Business Inventories and the flash print of the Consumer Sentiment for the month of January area are all due, followed by NY Fed J.Williams's (permanent voter, centrist) speech.

EUR/USD levels to watch

So far, spot is losing 0.11% at 1.1442 and faces the next up barrier at 1.1505 (100-day SMA) followed by 1.1516 (200-week SMA) and finally 1.1692 (monthly high Oct.18 2021). On the other hand, a break below 1.1355 (55-day SMA) would target 1.1272 (2022 low Jan.4) en route to 1.1221 (monthly low Dec.15 2021).

 

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.

Feed news Join Telegram

Recommended content


Recommended content

Editors’ Picks

AUD/USD remains pressured towards 0.6900 on Australian jobs negative surprise

AUD/USD remains pressured towards 0.6900 on Australian jobs negative surprise

AUD/USD stays directed towards 0.6900 following a negative surprise in the Australian Employment Change data. Softer wage and jobs data will likely dissuade the RBA from aggressive tightening. Investors assess Fed minutes and US-Taiwan news. 

AUD/USD News

EUR/USD drops towards 1.0150 amid risk-aversion, ahead of US data

EUR/USD drops towards 1.0150 amid risk-aversion, ahead of US data

EUR/USD turns south after rejection at 1.0200 as risk-off flows dominate. US dollar finds demand, despite weaker yields and cautious Fed minutes. The euro looks vulnerable amid the deepening EU energy crisis and growth risks.

EUR/USD News

Gold keeps bearish potential intact towards $1,750

Gold keeps bearish potential intact towards $1,750

Gold price sees a dead cat bounce as the tide turns against bulls. Fed minutes, US-Taiwan geopolitical news and Chinese stimulus hopes lend support. XAU/USD bears need to crack the critical $1,755 level to extend the downside.

Gold News

Shiba Inu price to provide another opportunity before a 50% upswing

Shiba Inu price to provide another opportunity before a 50% upswing

Shiba Inu price is on the verge of triggering another run-up, but it needs to allow investors who partook in the previous rally to book profits. As a result, more market participants are likely to flock around the next support level, triggering another leg-up.

Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!

BECOME PREMIUM

Forex MAJORS

Cryptocurrencies

Signatures