EUR/USD trims losses and regains the 1.0980 region
Following an early drop to the proximity of 1.0940, EUR/USD regains some composure and now retargets the key barrier at 1.1000 on Monday. EUR/USD now alternates gains with losses in the sub-1.1000 region on the back of the unabated upside bias in the greenback. Indeed, extra gains in the buck remain propped up by the march north in US yields along with markets’ expectations of a tighter rate path by the Federal Reserve, while the absence of news from the Ukraine war appears to sustain a cautious note in the risk complex. No data releases in the euro docket on Monday should leave all the attention to flash trade balance figures and the Dallas Fed manufacturing gauge due later in the NA session.
EUR/USD comes under further downside pressure and revisits the 1.0950/40 band in response to the firmer demand for the greenback at the beginning of the week. Occasional pockets of strength in the single currency should appear reinforced by the speculation of the start of the hiking cycle by the ECB at some point by year-end, while higher German yields, elevated inflation, the decent pace of the economic recovery, and auspicious results from key fundamentals in the region are also supportive of a rebound in the euro. So far, the spot is retreating 0.10% at 1.0970 and faces the next up barrier at 1.1037 (high March 25) followed by 1.1137 (weekly high March 17) and finally 1.1211 (55-day SMA). On the other hand, a drop below 1.0944 (weekly low March 28) would target 1.0900 (weekly low March 14) en route to 1.0805 (2022 low March 7).