EURO slowly raising, how far?
Euro regained above 1.2200 and touched the daily high at 1.2228 against USD. Today Euro had three jumps in Asian, European, and North American opening hours, while today, Germany, Switzerland, and some other European countries celebrate bank holidays and Canada.
Since today`s Economic calendar had nothing to move the Currency market, investors and traders watched the speeches. Also, the market participants used to follow the US inflationary pressures and the possibility of FED return in its current monetary policies.
Last week, as we read in the FED meeting minutes, some Federal Reserve officials suggested that FED slowly start discussing tightening policies with economic improvement.
Today, Brainard, Bostic, and George from the Fed had or going to have the speech. Lael Brainard earlier finished her speech. She said involving the Central Bank Digital Currencies (CBDC) is needful for the United States. Today she mostly talked about digital currencies; that`s why currency traders ignored her comments for EURUSD trading.
However, in the Q&A session, she said that the United States is "in the middle of an unprecedented rebound" for the economy. According to a surge in demand and supply chain, she is expecting "some" higher inflation as the economy recovers from pandemic lows, but this pressure will "subside over time."
However, in the current uptrend of the EURUSD chart, it is not just about weaker USD; some positive factors in the Euro Zone support the common currency, such as May PMI readings and re-opening of economies and borders across the EU region.
On the USD side, as much as we are getting closer to Friday`s PCE numbers, and it is getting more likely to see the higher levels in inflation, we are waiting to see the gain in the US ten-years Bond Yields as well as USD index. The expected rise in both Bond yields and US currency is mainly because that market pricing much more than before on the rising inflation, and it will be ended by less dovish policies of FED and hike the rates.
Technical overview
From the technical overview, In the H4 chart, pairing created a range between the 1.2170 and 1.2230 (Almost lower and higher bands of BB), waiting for the stronger signal to clear the next trend. RSI at 55 with the flat OBV line, both are passive, and while price traveling between the lower and higher bands of BB, none of them can confirm any specific trend in the near term.
Support levels: 1.2180 / 1.2140 / 1.2095
Resistance levels: 1.2245 / 1.2290 / 1.2330
