EUR/USD meets support in the 1.1300 neighborhood
The single currency regains the smile at the end of the week and helps EUR/USD return to the 1.1350 region. EUR/USD manages to reverse Thursday’s pullback and meets buying interest in the 1.1300 zones, regaining upside traction soon afterward. The recent price action in the spot falls within a consolidative theme, always amidst alternating risk appetite trends in the global markets. Friday’s uptick in spot comes amidst the offered stance in the greenback, which in turn appears under pressure amidst another decline in US yields along the curve. EUR/USD came under pressure after hitting new YTD highs in the 1.1480 regions earlier in the month, finding some contention in the low-1.1300s so far this week.
In the meantime, the Fed-ECB policy divergence and the performance of yields are expected to keep driving the price action around the pair for the time being. ECB officials have been quite vocal lately and now acknowledge that high inflation could last longer in the euro area, sparking at the same time fresh speculation regarding a move on rates by the central bank by end of 2022. On another front, the unabated advance of the coronavirus pandemic remains as the exclusive factor to look at when it comes to economic growth prospects and investors’ morale in the region. So far, the spot is gaining 0.27% at 1.1341 and faces the next up barrier at 1.1480 (100-day SMA) seconded 1.1482 (2022 high Jan.14), and finally 1.1510 (200-week SMA). On the other hand, a break below 1.1300 (weekly low Jan.21) would target 1.1272 (2022 low Jan.4) en route to 1.1221 (monthly low Dec.15, 2021).