EUR/USD bears attack 1.0750 with eyes on Eurozone Inflation, Biden-Powell meeting.

EUR/USD fades bounce off intraday low during the first negative daily performance in four.US dollar rebounds from monthly low amid firmer yields, month-end consolidation, eyes Biden-Powell meet amid inflation chatters.

EUR/USD fails to pick up bids as sellers flirt with the 1.0750-40 area, fading bounce off the daily low, ahead of Tuesday’s European session. That said, the firmer US dollar and the market’s anxiety ahead of the key Eurozone inflation data, as well as a meeting between US President Joe Biden and Fed Chair Jerome Powell, seem to have triggered the quote’s pullback from the monthly top.

US Dollar Index (DXY) consolidates the first monthly loss in five as it prints 0.30% daily gains around 101.65. In addition to the month-end positioning, the greenback gauge’s latest gains could also be linked to mixed sentiment and firmer US Treasury yields.

The market’s risk appetite wanes amid indecision over the Fed’s next move and geopolitical headlines. However, covid news and receding bets on the Fed’s aggressive rate hikes seem to favor the US stock futures.

Further, the Eurogroup’s agreement on fresh sanctions over Russian oil imports and comments from Ukrainian President Volodymyr Zelensky, suggesting an ‘extremely difficult’ situation in the Donbas region, per Reuters, weigh on EUR prices.

Given the cautious mood and the US dollar rebound, the EUR/USD prices are likely to remain depressed ahead of the bloc’s inflation data for May, per the Harmonised Index of Consumer Prices (HICP) gauge. That said, Eurozone HICP YoY is expected to refresh multi-year high with 7.7% figures versus 7.4% prior whereas the HICP-X F, E, A, T, also known as core inflation, bears the consensus of reprinting 3.5% YoY figures. Should the bloc’s inflation data manage to refresh its multi-year high, the hawkish ECB will get justification and can propel the pair. On the same line will be any push for rethinking the Fed’s faster rate hikes during the Biden-Powel meeting.

Technical analysis

EUR/USD bears attack 50-DMA support near 1.0740, a break of which will direct the sellers towards an upward sloping support line from May 13, close to 1.0685. Meanwhile, March’s low near 1.0810 restricts the immediate upside of the major currency pair.

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