EUR/USD abandons the area above the 1.1300 mark
The single currency fades part of Friday’s optimism and drags EUR/USD back to the area well south of the 1.1300 mark at the beginning of the week. EUR/USD so far reverses two consecutive daily advances and returns to the 1.1260 region in the European markets and against the backdrop of a broad-based recovery in the US dollar. Indeed, the greenback regains upside traction and manages to leave behind part of Friday’s acute pullback, as investors continue to favor the safer assets in a context of rising uncertainty following the discovery of the newly dubbed omicron variant of the coronavirus in southern Africa.
Earlier in the session, ECB’s I.Schnabel said the inflation is expected to lose traction and she sees it returning to the bank’s target during next year. Schnabel also deemed as premature any attempt to tighten the current monetary conditions. In the domestic calendar, the European Commission will publish the final Consumer Confidence gauge for the month of November seconded by preliminary inflation figures in Germany during the same period. In addition, Chairwoman C.Lagarde is due to speak in Turin followed by speeches by Board members A.Enria, I.Schnabel, P.Hakkarainen, and L. De Guindos. So far, the spot is losing 0.39% at 1.1261 and faces the next up barrier at 1.1332 (weekly high Nov.26) followed by 1.1374 (high November 18) and finally 1.1398 (20-day SMA). On the other hand, a break below 1.1186 (2021 low Nov.24) would target 1.1185 (monthly low Jul.1, 2020) en route to 1.1168 (low Jun.19, 2020).