- The common currency continues its recovery in the week, up by 0.81%.
- The market mood remains fragile, though Wednesday weighed on the greenback.
- EUR/USD Price Forecast: Upward biased in the near-term, a test of the 1.0600 figure is on the cards.
The shared currency extends its gains in the week, advances for the third straight day, up by 0.45%, amidst a mixed market mood surrounding the financial markets. At the time of writing, the EUR/USD is trading at 1.0576.
Sentiment is mixed. European bourses ended with losses, while US equities remain positive. In the meantime, the EUR/USD held its gains, despite a dismal EU Consumer Confidence print of -23.6, compared to expectations of -20.5. The major barely reacted to the news, as the EUR/USD remained underpinned by higher German 10-year yields, alongside a weaker US dollar. Also, traders were focused on Fed Chair Jerome Powell testifying at the US Senate.
On Wednesday, the US Federal Reserve Chief Jerome Powell testified at the US Senate. He said that the central bank remains committed to bringing inflation down and added that data and the US economic outlook would determine the pace of tightening. Additionally, for the first time, he acknowledged that hiking rates could tip the US economy into a recession and called that a soft landing will be “very challenging.”
Elsewhere, the US Dollar Index, a measure of the greenback’s value against its peers, remains heavy, falling 0.30%, sitting at 104.110, while the US 10-year Treasury yield got no support from Powell, down thirteen basis points, yielding 3.145%.
Ahead of the week, the EU economic docket will be busy, featuring S&P Global PMIs in France, Germany, and the Euroarea. Also, the ECB will host a General Council Meeting. Across the pond, the US calendar will feature Fed Chief Jerome Powell’s second day at the US Congress, Initial Jobless Claims, and S&P Global PMIs.
EUR/USD Price Forecast: Technical outlook
In the last seven days, the EUR/USD has advanced steadily in six, though the negative day was absorbed by June’s 20 and 21 price action. EUR/USD traders should note that the Relative Strength Index (RSI) at 49.45 is aiming higher after breaking above the RSI’s 7-day SMA, suggesting some buying pressure is mounting on the pair.
Therefore, the EUR/USD is upward biased in the near term. That said, the EUR/USD first resistance would be the 1.0600 figure. A breach of the latter would expose the June 10 daily high at 1.0642, closely followed by the 1.0700 mark.