EUR/USD Today Rises To 1.0600 Point As US Dollar Plunges

EUR/USD today is reported to have printed a slight increase around 1.0620 as it consolidates the recent decline near the lowest level in seven weeks since Thursday morning. This information is based on a report from fxstreet regarding the development of the EUR/USD price.

 Thus, the Euro currency welcomed the slightly positive sentiment in the market. The currency pair posted gains for the first day while its prices bounced off the lowest level since early January marked the previous day amid hopes for fresh economic data. Recent strong global activity figures and comments from central bankers from the Western region have raised hopes that a recession is less likely. Even if it does occur in certain parts of the world, the effects will be mild and short-lived. Supporting the cautious optimism is the recent retreat in US inflation expectations. The 10-year and 5-year FRED yields signaled a retreat in US inflation expectations by retreating from multi-month highs. Elsewhere, the FOMC Meeting Minutes stated that all participants agreed that further rate hikes are needed to achieve the inflation target. The same initially triggered a risk-off market mood and supported EUR/USD’s decline today before the details showed that policymakers also discussed easing the rate hike trajectory.

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The same highlights weaker inflation expectations as the main concern for the recent improvement in the mood. Comments from US President Joe Biden are also seen as responsible for the latest slightly optimistic sentiment. As per the US President’s latest comments, his Russian counterpart is not in a position to use nuclear weapons and break international treaties. However, the fears of a Russia-Ukraine war are not over yet, with the latest news from the West and China adding to the problem. The WSJ recently reported that the US is considering releasing intelligence on potential arms transfers from China to Russia. Earlier, the relationship between the two countries seemed to have escalated geopolitical woes as the US strongly criticized the move and preferred to rush towards risk-freedom. Talking about the mixed data from Europe, the German IFO business climate jumped to 91.1 in February, as compared to 91.4 from the previous expectation of 90.1. While the current assessment dropped to 93.9 from 94.1 from the previous reading and analysts’ estimates of around 95.00. Further, the IFO expectations level also rose to around 88.5 compared to market consensus of 88.4 with the previous reading of 86.4. Klaus Wohlrabe from the Institute of Economists said that the German economy is not going into recession at the moment, but it is still mild. It is worth noting that the German inflation gauge, HICP confirmed the preliminary estimate of 9.2% year-on-year (YoY). Against this backdrop, the S&P 500 edged up to a light reading around 4,020, while yields remained unchanged amid the Japanese holiday. Further, the final reading of the bloc's inflation gauge and bloc catalysts will be crucial for EUR/USD traders ahead of the second reading of the US PCE details for Q4, and the preliminary reading of the US Q4 GDP.

Technical analysis

EUR/USD remains on the bearish radar around 1.0740, bouncing back above the support turned resistance level.

Warning !

This analysis is based on fundamental and technical views from trusted sources, not advice or invitation. Always remember that this content is intended to enrich the reader's information. Always use independent research first regarding other forex information to be used as a reference in your trading.