EUR/USD seems to have settled around 1.1300 mid-week. The pair remains indecisive in the near-term but the shared currency looks increasingly unlikely to outperform the greenback in a convincing way, in the view of FXStreet’s Eren Sengezer.
Euro unlikely to stage a convincing rebound ahead of US events
“The US T-bond yields' reaction to Wednesday's US events will be the key driver behind the dollar's market valuation. In case the benchmark 10-year US T-bond yield climbs above 1.7% on a hawkish Fed outlook, we could see EUR/USD turning south in the second half of the day. On the other hand, the pair's upside could remain capped even if the dollar weakens on falling yields.”
“On the upside, 1.1320 (20-period SMA, 50-period SMA, broken ascending trend line) aligns as the first technical hurdle before 1.1340 (static level) and 1.1360 (post-ECB high, static level).”
“Initial static support is located at 1.1270. With a daily close below that level, EUR/USD could target 1.1240 (static level) on the downside before testing 1.1200 (psychological level).”