EUR/USD: Corrective pullback eyes 1.1485 amid softer USD

EUR/USD keeps Friday’s rebound from yearly low, retreats of late.
Mixed chatters over Fed rate hike join hopes over US stimulus, phase 1 deal to favor buyers.
ECB policymakers stay divided over inflation fears.
DXY tracks US Treasury yields lower, equity traders seem divided.

Anil Panchal FXStreet

EUR/USD grinds higher around 1.1560, up 0.10% intraday heading into Monday’s European session. The major currency pair dropped to a fresh 16-month low on Friday before bouncing off 1.1432. In doing so, the quote formed a Doji candlestick formation, underpinning the latest rebound amid mildly offered US Treasury yields and the US dollar.

The mixed concerns over the US stimulus and inflation, as well as the Fed rate hike following Friday’s surprisingly downbeat Michigan Consumer Sentiment data that slumped to a 10-year low, seem to underpin the cautiously optimistic market mood. On the same line were the latest comments from US Treasury Secretary Janet Yellen and Federal Reserve Bank of Minneapolis President Neel Kashkari, coupled with the hopes of the US-China phase 1 deal.

Even so, the Fed rate hike concerns remain elevated, ignoring the policymakers’ ‘transitory’ outlook for inflation, as inflation expectations and details of the consumer confidence data highlight the reflation fears.

It’s worth noting that the recently mixed comments from the European Central Bank’s (ECB) policymakers also underpin the EUR/USD rebound. On Friday, Governing Council member Gediminas Simkus said inflation will fall below target in 2023, adding that it is not in line with the forward guidance conditions. His fellow Official at the ECB Olli Rehn said on Friday that the relief on supply bottleneck may not arrive until toward the end of 2022, as reported by Reuters.

Amid these plays, the US 10-year Treasury yields drop 2.4 basis points (bps) to 1.56% whereas the S&P 500 Futures struggle for a clear direction amid a sluggish Asian session.

Looking forward, a light calendar and the upcoming US-China talks may keep EUR/USD moves confined ahead of Tuesday’s US Retail Sales, expected to keep 0.7% MoM growth.

Technical analysis

Friday’s Doji joins nearly oversold RSI conditions and multiple supports to the downside to keep EUR/USD buyers hopeful to challenge the support-turned-resistance line from October, near 1.1485. On the upside, the further downside will aim for the previous day’s low of 1.1432, a break of which will direct EUR/USD towards June 2020 top, surrounding 1.1422.

Additional important levels

Overview
Today last price	1.1456
Today Daily Change	0.0010
Today Daily Change %	0.09%
Today daily open	1.1446

Trends
Daily SMA20	1.1584
Daily SMA50	1.1646
Daily SMA100	1.1726
Daily SMA200	1.1878

Levels
Previous Daily High	1.1462
Previous Daily Low	1.1433
Previous Weekly High	1.1609
Previous Weekly Low	1.1433
Previous Monthly High	1.1692
Previous Monthly Low	1.1524
Daily Fibonacci 38.2%	1.1444
Daily Fibonacci 61.8%	1.1451
Daily Pivot Point S1	1.1432
Daily Pivot Point S2	1.1418
Daily Pivot Point S3	1.1403
Daily Pivot Point R1	1.1461
Daily Pivot Point R2	1.1476
Daily Pivot Point R3	1.1491

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.