EUR/USD gives away part of the weekly advance on Wednesday.
Sellers seem to have regained the upper hand around the European currency and now put EUR/USD under some pressure near the 1.0700 neighbourhood on Wednesday.EUR/USD appears supported near 1.0700, looks at Lagarde
After two consecutive daily advances – including a brief test of the area beyond 1.0800 the figure on Tuesday – EUR/USD now faces some loss of momentum and recedes to the 1.0700 zone, where decent contention seems to have turned up.
In the meantime, the dollar regains some composure following the heightened volatility in the wake of the publication of the US inflation figures on Tuesday.Furthermore, the pair keeps the multi-session consolidative theme in the lower end of the recent range unchanged so far, as investors continue to closely monitor message from both the ECB and the Fed policymakers.
In the domestic calendar, EMU Balance of Trade figures are due seconded by Industrial Production and the speech by Chairwoman C.Lagarde at the European Parliament. Busy day across the pond, as Retail Sales, MBA Mortgage Applications, Industrial Production, the NAHB Index, Business Inventories, the NY Empire State Index and TIC Flows are all scheduled for later in the NA session.
What to look for around EUR
Despite the recent rebound to the 1.0800 region, EUR/USD remains within the multi-day consolidative phase and decently supported near 1.0650 for the time being.
In the meantime, price action around the European currency should continue to closely follow dollar dynamics, as well as the potential next moves from the ECB after the bank has already anticipated another 50 bps rate raise at the March event.
Back to the euro area, recession concerns now appear to have dwindled, which at the same time remain an important driver sustaining the ongoing recovery in the single currency as well as the hawkish narrative from the ECB.
EUR/USD levels to watch
So far, the pair is retreating 0.09% at 1.0727 and a drop below 1.0655 (weekly low February 13) would target 1.0481 (2023 low January 6) en route to 1.0324 (200-day SMA). On the flip side, the next up barrier aligns at 1.0804 (weekly high February 14) seconded by 1.1032 (2023 high February 2) and finally 1.1100
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