Market news
21.12.2022, 09:02

EUR/USD struggles for a firm direction, stuck in a narrow band just above 1.0600 mark

  • EUR/USD extends its sideways consolidative price action and remains confined in a range.
  • The Fed’s hawkish outlook, rising US bond yields underpin the USD and act as a headwind.
  • The risk-on impulse caps gains for the safe-haven buck and lends some support to the pair.

The EUR/USD pair continues with its struggle to gain any meaningful traction and remains confined in a narrow trading band held since the beginning of this week. The pair, however, manages to hold its neck above the 1.0600 mark through the first half of the European session on Wednesday.

The US Dollar regains some positive traction and reverses a part of the overnight sharp fall, which, in turn, is seen acting as a headwind for the EUR/USD pair. The Bank of Japan's policy tweak triggered a sell-off in bond markets on Tuesday and pushed the US Treasury bond yields higher. Apart from this, the Federal Reserve's hawkish commentary last week lifts the yield on the benchmark 10-year US government bond to a fresh monthly top and benefits the greenback.

That said, a goodish recovery in the global risk sentiment - as depicted by a generally positive tone around the equity markets - seems to cap gains for the safe-haven buck. Furthermore, hawkish signals from the European Central Bank (ECB), indicating that it will need to raise rates significantly further to crush inflation, underpins the shared currency. The combination of factors offers some support to the EUR/USD pair and helps limit the downside, at least for now.

On the data front, the Gfk German Consumer Confidence Index improves to -37.8 for the current month from -40.1 in November, though does little to provide any impetus. Market participants now look forward to the US economic docket, featuring the release of the Conference Board's Consumer Confidence Index. This, along with the US bond yields and the market risk sentiment, will influence the USD and produce short-term opportunities around the EUR/USD pair.

Technical levels to watch

 

© 2000-2024. All rights reserved.

This site is managed by Teletrade D.J. LLC 2351 LLC 2022 (Euro House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the Grenadines).

The information on this website is for informational purposes only and does not constitute any investment advice.

The company does not serve or provide services to customers who are residents of the US, Canada, Iran, The Democratic People's Republic of Korea, Yemen and FATF blacklisted countries.

AML Website Summary

Risk Disclosure

Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.

Privacy Policy

Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.

Please contact our PR department if you have any questions or need assistance at pr@teletrade.global.

Bank
transfers
Feedback
Live Chat E-mail
Up
Choose your language / location