fundamental News - EUR/USD

EUR/USD pushing higher tpwards 1.16477 on this early Tuesday trading, as the US dollar runs into risk-on market mood.

The Asian markets follow through Wall Street tech advance on prospects of robust corporate earnings reports, which cooled off concerns over rising inflationary risks and thier impact on the economic recovery.

The retreat in the US Treasury yields and a pause in the yield curve flattening, in the face of disappointing American Industrial Production data, add legs to the recovery momentum in the main currency pair.

However, the divergent monetary policy outlooks between the Fed and the European Central Bank (ECB) could likely pose a downside risk to EUR/USD’s further upside. The Fed is well on track to withdraw the pandemic stimulus as early as November while the ECB calls for keeping a high degree of flexibility in the post-crisis stimulus measures.

 “I think flexibility should remain we certainly have to discuss how to adjust our purchase programs,” ECB policymaker Ignazio Visco said on Monday.

In the day ahead, the pair will remain at the mercy of the US dollar price action and the risk trends amid a data-light economic calendar. The speeches from the ECB and Fed policymakers will hog the limelight.

Technical analysis
EUR/USD bounced off the 4-hourly 100-SMA at 1.16009 in early Aussie session now trading around 1.16494. Weekly trendline resistance is the 1.16800 with the 200-SMA just above it at 1.16989 which merge with the weekly fibonacci 38.2%.

expectation today: bullish



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