EUR/USD Erases Weekly Gains As Dollar Strengthens
Alex Boltyan | Jun 28, 2022 05:16PM ET
The EUR/USD pair came under pressure on Tuesday and trimmed Friday and Monday’s gains as the greenback strengthened across the board with lingering recession fears weighing on the market’s mood.
The euro got an early boost after European Central Bank President Christine Lagarde at the ECB Forum on Central Banking reiterated that the bank intends to raise rates by 25 bps in July but isfastert a faster pace if needed.
Meanwhile, disappointing US data did not prevent the dollar from advancing. The Conference Board’s Consumer Confidence Index dropped to 98.7 in June, the lowest level in 16 months. The Richmond Manufacturing Index tumbled to -19 in June versus the market consensus of -11.
Wall Street indexes posted sharp losses, the worst day for the US stock market in two weeks, with the NASDAQ leading the way down again. United States 10-Year Treasury yields seesawed throughout the session and ended slightly lower at 3.175%.
On Wednesday, the focus will be on the ECB Forum’s policy panel, which will feature Fed Chair Jerome Powell, BoE Governor Andrew Bailey, and ECB President Christine Lagarde.
According to the daily chart, the short-term technical perspective for the EUR/USD pair has turned neutral. The RSI is flat below its midline, while the MACD prints dwindling green bars, showing the loss of buying interest.
The immediate support level is seen at the 1.0500 mark. A break below this level could mount bearish pressure and send the EUR/USD to the 1.0470 area, exposing the cycle low of 1.0348.
On the other, immediate resistance is seen at the 20-day SMA at 1.0565, followed by a descending trendline drawn from February highs at around 1.0640. A break above this line could improve the short-term perspective.
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