fundamental News - EUR/USD
EUR/USD recovering from previous session loss in the Asian trading this Friday.
The US 10-year benchmark yields retreat to a 3-month low of 1.43%
from the previous day’s close at 1.45%. The US Dollar Index (DXY)
follows the yields and breaks below the 90.00 mark to trade on Friday.
As of writing the DXY was last seen trading at 89.72,
down 0.12%.
The move is the reaction to waning inflation anxiety among
investors. The US annual inflation rate came at 5%, above the Fed
expectations. However, it failed to trigger any significant market
reaction as it seems the news is being already discounted.
Meanwhile, a Reuters poll of economists showed that the Fed is
likely to announce QE tapering measures in August or September on rising
pricing pressures.
On the other hand, the euro moved a little higher after the ECB
left its cash rates unchanged, despite the higher economic projections.
The ECB President Christine Lagarde reaffirmed that the central bank is
committed to its bond purchasing program even
at a higher rate than the previous one. The central bank for the first
time since 2018, confirmed that the Eurozone economy is no longer
overshadowed by risk to its growth outlook.
On the economic docket, traders would have the opportunity to trace
German Wholesale Price, US Michigan Inflation and Consumer Sentiment to
take some fresh trading impetus.
As for now, the dynamics around the US dollar continue to influence the pair’s performance.
Technical analysis
The 4-hourly 100-SMA 1.21954 resistant is the first level the
EUR/USD need to get above before meeting the trendline resistance around
1.22000.
Supporting the euro is the 50-SMA at 1.21828 and then the 200-SMA at 1.21484.
Expectation today: bullish
