The EUR/USD trading pair has regained its strength after two straight days of decline. The pair’s move up has taken it to a height of 1.1430 on Wednesday.
Eyes on USD and Bond Yields
After the EUR/USD pair resumed its upward mobility, it speedily left behind its latest bearish position after its 2022 heights over 1.1480 on the 4th of February. The short-term positive move is until now underpinned by a five-month line, about 1.140 today.
Meanwhile, bond yields performance in both the U.S and Europe keeps calling the shots on price actions on the pair alongside the policy tightening speculations from the European Central Bank and the Federal Reserve. These are all against the background of the persistent inflation crisis.
In European internal issues to be resolved, Germany’s trade surplus dwindled to 6.8 billion euros in December, all the way from 10.9 billion euros, whereas the current account surplus pushed up to 23.9 billion euros in the same month of December.
Italy’s industrial production numbers are scheduled to come in later in the week.
What Expectations to Have from the Euro
There seems to be fair support for EUR/USD around the 1.1400 levels at the moment, and possibly for some time to come. The positivity surrounding the spot appears to be under threat from the recovery of the dollar, which has especially regained its power following the Non-farm Payrolls’ January surprise upside.
It now seems like the boost in the pair’s better outlook is caused by speculations of an increase in interest rates by the European Central Bank in the middle of the year. It is also supported by higher bond yields in Germany, relatively high inflation in the Eurozone and a good momentum of the economic rebound alongside other fundamental activities.
Important events in the Eurozone this week include Germany’s Balance of Trade presentation on Wednesday, and then the release of their Consumer Price Index is expected on Friday.
Part of the eminent topics on the front burner is the lopsided economic recovery after the pandemic in the Eurozone. Speculations of ECB policy tightening in the middle of the year. The presidential election in France, political instability between Ukraine and Russia.
As it is, the spot is improving by 0.8% at 1.1423, and its next possible barrier is 1.1483 -2022 February 4 high- then it will be 1.1496 –the 200 weeks SMA- and lastly, 1.1667 -200 days SMA.