Look on today
EUR/USD posted a four-day losing streak below 1.0800 with ECB hawks retreating and US data and yields in focus.
EUR/USD is falling for the fourth day in a row as bears tighten their grip amid a firmer US dollar.
The decline in yields led by the Bank of Japan is helping the US dollar regain its strength.
Tougher EU statistics allow ECB officials to ease the hawkish bias, and US data could add to the bullish strength in case of a stronger December result.
EUR/USD remains on the sidelines as it drops to 1.0770 in four days heading into Wednesday’s European session with the major currency pair bearing the brunt of a broad USD rebound as well as an easing of the hawkish bias towards the ECB’s next move.
However, the American (DXY) is poised for its biggest daily gain in two weeks, rising for the third day in a row near 102.90 by press time, so the dollar’s gauge against the six major currencies derives strength from lower Treasury yields due to the Bank of Japan’s inaction.
Yields as it reverses a rebound early in the day, falling around 3.48%, while S&P 500 futures posted an intraday gain of 0.30% after moderate negative signs of daily performance. In the same vein, Japanese government bonds fell to 0.362% after Bank of Japan announcements of 0.50%. by the Bank of Japan.
The Bloomberg news sparked circulating talks about the European Central Bank’s (ECB) slow rate hike starting in February and weighed on the euro, Bloomberg said. This news has benefited from recent positive data from Germany and the Eurozone as well as mixed comments from European Central Bank policy makers.
On Tuesday, headline German ZEW figures showed that the Economic Sentiment Index returned to positive territory, reaching 16.9 in January from -23.3 in December, beating market expectations of -15.5. On the other hand, the ZEW Economic Sentiment Index for the Eurozone rose to 16.7 from -23.6.
It should be noted that European Central Bank Governing Council member and Bank of Portugal Governor Mario Centeno said yesterday that fourth-quarter growth in Europe is likely to remain positive on the contrary, Chief Economist Philip Lane told the Financial Times (Financial Times) that interest rates should be higher than it is now.
Given that the EUR/USD bulls are likely to regain control it all depends on how well the US Retail Sales and December PPI expected 0.1% and -0.1% MoM vs -0.6% and 0.3% respectively could push the USD.
Technical Analysis
The 1-month-old former resistance line joins the 21-DMA to highlight 1.0680 as a key short-term support for the EUR/USD bears.
expected scenario
Continuing the decline to 1.0745, then returning the rise again to 1.0785, then declining again, but if the pair closes for four hours above 1.0830, the pair may return to test the important resistance level at 1.0860, and buyers need to close the last four hours above this resistance in order to regain control.
