- The EUR/USD is trading around the round $1.2300 level, slightly in the middle of the day's trading range.
- The Monetary Policy Report by the Fed and various public appearances from FOMC members did not change the picture for US Monetary Policy.
The EUR/USD is trading steadily around $1.2300 in narrowing trading ranges in the last session of the week. The calm comes as US stock markets are slightly higher and US bond yields slide to around 2.87% after hitting new 4-year highs earlier in the week.
The Federal Reserve published its Monetary Policy Report, a semi-annual document that precedes the testimony of the Fed Chair next week. Tension is mounting towards the first appearance of Chair Powell on Tuesday next week. However, the report today did not trigger any significant headlines. The Fed foresees the current path of gradual rate hikes to continue. Without an acceleration in the path of hikes, the greenback does not have further reasons to rise.
The Fed is content with the ongoing economic expansion, the steady gain in jobs, high consumer sentiment and the global growth environment. They did express some worries about high equity valuations in various areas and mentioned the use of leverage. Nevertheless, the document does not reveal a concern for breakout inflation.
FOMC members Rosengren and Dudley spoke earlier on, but they did not make any significant comments on monetary policy. Earlier in the day, euro-zone inflation numbers confirmed the early read of 1.3% YoY headline CPI and 1.0% core CPI in January.
The US Dollar has been tracking the benchmark 10-year yields and is likely to continue doing so.
EUR/USD technical levels
The high of $1.2336 is the immediate level of resistance, coinciding with the January support line around those levels. Further above, $1.2450 capped the pair earlier in the month. It is followed by $1.2555, the 3-year high seen last week.
Looking down, the low of $1.2205 serves as a line of support below the daily trough of $1.2279. Further below, the low of $1.2160 seen in early January is the next level to watch, and it is followed by the 2017 high of $.12090.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stays in positive territory above 1.0850 after US data
EUR/USD clings to modest daily gains above 1.0850 in the second half of the day on Friday. The improving risk mood makes it difficult for the US Dollar to hold its ground after PCE inflation data, helping the pair edge higher ahead of the weekend.
GBP/USD stabilizes above 1.2850 as risk mood improves
GBP/USD maintains recovery momentum and fluctuates above 1.2850 in the American session on Friday. The positive shift seen in risk mood doesn't allow the US Dollar to preserve its strength and supports the pair.
Gold rebounds above $2,380 as US yields stretch lower
Following a quiet European session, Gold gathers bullish momentum and trades decisively higher on the day above $2,380. The benchmark 10-year US Treasury bond yield loses more than 1% on the day after US PCE inflation data, fuelling XAU/USD's upside.
Avalanche price sets for a rally following retest of key support level
Avalanche (AVAX) price bounced off the $26.34 support level to trade at $27.95 as of Friday. Growing on-chain development activity indicates a potential bullish move in the coming days.
The election, Trump's Dollar policy, and the future of the Yen
After an assassination attempt on former President Donald Trump and drop out of President Biden, Kamala Harris has been endorsed as the Democratic candidate to compete against Trump in the upcoming November US presidential election.