EUR/USD Current Price: 1.0566
A better market mood and caution ahead of the Federal Reserve decision weigh the dollar.The EU Producer Price index soared to 36.8% YoY in March, signaling persistent price pressures.EUR/USD trades near the upper end of its latest consolidative range, still at risk of reaching lower lows.
The EUR/USD pair is up on Tuesday, currently trading at around 1.0565, as a better market mood constrained demand for the American currency, which anyway holds on to substantial yearly gains against most major rivals. Investors are becoming cautious ahead of the US Federal Reserve monetary policy decision, to be out on Wednesday.
The improved sentiment, however, is likely to be short-lived. Spiraling inflation, tensions in Europe amid the Russian war on Ukraine and a rising number of coronavirus contagions not only in China anticipate a long road ahead towards economic stability. At the same time, central banks are draining markets from easy money meant to provide support in the early stages of the pandemic.
Asian and European indexes trade in the green, reflecting a better perception of risk, while government bond yields give up some of their Monday’s gains. The yield on the 10-year US Treasury note peaked at 3%, now hovering around 2.95%, while the German note yielded over 1% for the first time since 2015.
EUR/USD short-term technical outlook
The EUR/USD pair stands near its daily high and nearing the upper end of its latest range at 1.0592. The daily chart shows that the pair remains below bearish moving averages, while technical indicators have barely bounced from oversold readings. Overall, the advance seems corrective, with the risk still skewed to the downside.
In the 4-hour chart, the pair has jumped above a now flat 20 SMA, while technical indicators head firmly higher within positive levels, suggesting more near-term gains in the docket. Nevertheless, the pair keeps trading far below a bearish 100 SMA, currently providing dynamic resistance at around 1.0740.
EUR/USD rebounds above 1.0550 amid renewed dollar weakness.EUR/USD has gathered bullish momentum during the European trading hours and climbed above 1.0550. Falling US Treasury bond yields seem to be causing the dollar to lose its strength and allowing the pair to stage a rebound. Investors await mid-tier US data and ECB President Lagarde’s speech.
GBP/USD rebounds to mid-1.2500s following earlier drop.GBP/USD has regained its traction after having dropped below 1.2500 earlier in the day. The renewed selling pressure surrounding the greenback seems to be fueling the pair’s recovery in the second half of the day on Tuesday.
Gold erases daily losses, trades near $1,860 on falling US yields.With the benchmark 10-year US Treasury bond yield falling into negative territory below 3% on Tuesday, gold managed to erase its daily losses and was last seen trading near $1,860. Earlier in the day, XAU/USD touched its lowest level since mid-February at $1,850.