The Euro has retraced some of yesterday’s losses after broad market sentiment picked up after Chinese authorities cracked down on protesters.
EUR/USD made a five-month high just shy of the psychological 1.05 level on Monday before the rout kicked in. So far on Tuesday, the Euro made up some lost ground with the US Dollar sliding lower across the board.
The weaker US Dollar comes despite several Federal reserve speakers reminding markets that tighter monetary policy lies ahead.
Fed board members James Bullard, John Williams and Lael Brainard led the hawkish rhetoric in the North American session before Thomas Barkin picked up the baton after the New York close.
The over-arching message was consistent. Although rate increases have decelerated, rates are going higher and they might stay there for longer than the market currently thinks.
Wall Street took heed with the Dow, SP 500 and Nasdaq all finishing the cash session down around 1.5%. Futures are pointing to a steady start when they re-open later today.
Chinese and Hong Kong equity indices raced higher after authorities cracked down on protesters that are opposed to ongoing lockdowns there.
Treasury yields have made up a couple of basis points across the curve that was lost on Monday. The US 2s 10s yield curve dipped below -0.80% again overnight.
EUR/USD TECHNICAL ANALYSIS
EUR/USD was unable to hold onto a five-month high yesterday and has since fallen back into the recent range of 1.0223 – 1.0482.
Support could be at the recent low of 1.0223 ahead of the breakpoint at 1.0198.
On the topside, resistance might be twin peaks of 1.0482 and 1.0497 or further up at the June high of 1.0615 which is slightly below a breakpoint at 1.0638.
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