fundamental News - EUR/USD
EUR/USD stays mildly bid around 1.2140 amid Tuesday’s Asian session. In
doing so, the currency major pair fails to extend the previous day’s
pullback from a 10-week high as market sentiment dwindles. The recent
moves seem to struggle for fresh clues as traders
are divided over reflation fears and dialing back to the key central
banks’ easy money policies.
The European Central Bank (ECB) policymaker Isabel Schnabel
recently crossed wires, via Reuters, while rejecting fears from German
inflation. The ECB Executive Board Member signaled upside risk to the
bloc’s key economy but also said, “the European Central
Bank considers this a transient rise and will not adjust policy in
response.”
Chicago Federal Reserve Bank President Charles Evans and San
Francisco Federal Reserve Bank President Mary Daly were also on the same
lines while rejecting the fears of recent early signals for the
inflation data. It should, however, be noted that Dallas
Fed President Robert Kaplan stuck to his call to discuss tapering but
failed to get any support.
It’s worth mentioning that Friday’s NFP-backed risk-on mood fizzled
the previous day as market players turn cautious ahead of Wednesday’s
US Consumer Price Index (CPI) data. Also, contrasting moves between the
increasing covid risk from Asia and upbeat
vaccine updates from the West add to the trader’s confusion.
Even so, Wall Street closed in red, led by technology shares, while
the US 10-year Treasury yields pause around 1.60% after rising for the
last two consecutive days.
Looking forward, May’s ZEW Survey data for Eurozone and Germany
will precede comments from various Fed policymakers to offer near-term
direction to the EUR/USD traders. However, risk catalysts and the
pre-CPI sentiment will be crucial to follow.
Technical analysis
price broke above the trendline resistant to resume bullish momentum.
Trendline support sitting at 1.20800, expect a push to test the Febuary
high of 1.22422.
Expectation today: bullish