- EUR/USD falls to 2-day lows near 1.0660 on Wednesday.
- ECB President Lagarde will speak later.
- US Retail Sales surprised to the upside in January.
The strong rebound in the dollar puts the risk space under further pressure and forces the EUR/USD to trade near the monthly lows on Wednesday.
EUR/USD: Selling pressure picks up after US data
The EUR/USD pair accelerated its movement after the rebound in the dollar gained more strength on Wednesday.
Indeed, selling pressure is keeping the pair depressed and close to the February low around 1.0650, especially after strong US retail sales figures for January, while rising US US yields along the curve also support the dollar.
The US economic calendar also offered the Empire State Manufacturing Index figures with an improvement to -5.8 for the month of February, while Industrial Production grew 0.8% in the year to January and remained unchanged against to the previous month.
The NAHB index and business inventories will follow.
What should be taken into account around the euro?
Despite the recent bounce towards the 1.0800 zone, EUR/USD remains within the multi-day consolidation phase and has decent support near 1.0650 for now.
Meanwhile, the evolution of the prices of the European currency should closely follow the dynamics of the dollar, as well as the possible next movements of the ECB, after the bank has already anticipated another rate hike of 50 basis points at the meeting of March.
Returning to the euro zone, it seems that the concern about the recession has dissipated, although it continues to be an important factor for the recovery of the single currency, as well as the ECB’s aggressive line of discourse.
EUR/USD levels
For now, the pair is down 0.57% at 1.0680 and a drop below 1.0655 (weekly low Feb 13) would target 1.0481 (low Jan 6) en route to 1.0324 (200-day SMA). On the opposite side, the next bullish barrier is at 1.0804 (weekly high on February 14), followed by 1.1032 (high on February 2) and finally 1.1100 (round level).
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
