EUR/USD Gyrating Around 1.1900, Struggles for Direction

2 min read
23 Mar, 21
Written by Clover4X

 

 

Article Highlights:
  • EUR/USD pressured below 1.1900 as investors take stock of current developments
  • Fed’s Powell and Secretary Yellen to address the state of the US economy later today

EUR/USD Gyrating Around 1.1900

The EUR/USD pair has been circulating around the 1.1900 mark for the past couple of weeks. Traders and investors are trying to narrate the pair’s direction swayed by economic developments on both sides of the Atlantic.

The continued consolidation has so far lasted since the second week of March. That’s when the EUR/USD entered the range between 1.1850 and 1.1990. Currently, the pair is trading at 1.1891, lower by 0.50% on the day from a high of 1.1940.

On the technical front, the EUR/USD exchange rate remains close to the 200-day moving average. It is also in a medium-term downtrend that started in the first trading week of the year when the pair reached a high of 1.2349. Since then, the pair has depreciated by 3.7% to the current market price. The yearly low was seen on March 9 when the pair slipped to 1.1835 before bulls bought the dip and sent it to a monthly high of 1.1989.

On the news front, market participants are being pushed to both sides as a series of developments sway the currency pair. In the US, the rise in bond yields is making the US dollar more favorable in the eyes of investors. This could translate to a slide in the value of the EUR/USD. On the other hand, fears of inflation could decrease the purchasing power of the US dollar over time and investors are worried that the Federal Reserve could let the economy inflate before it decided to interfere.

Gloomy Outlook in Europe While US Fed Eyes Recovery

In Europe, Covid-19 confirmed daily cases remain high and the eurozone is entering into the second quarter with renewed lockdowns and vaccine shortfalls. The gloomy picture in the old continent could further weigh the EUR/USD exchange rate. In contrast, the US is going through a successful vaccination campaign that has surpassed 125 million vaccine doses administered.

Later today, Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen are scheduled to appear before Congress. They are expected to discuss their role in supporting the US economy on its way towards recovery from the pandemic.

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