EUR/USD Extends Pullback From Monthly Highs, Holds Up Above 1.0900
2023.06.20 10:21
The pair is moving a tad lower on Tuesday after two consecutive daily declines as US traders return to their desks following Monday’s holiday.
At the time of writing, the EUR/USD pair is trading at the 1.0920 zone, a few pips below its opening price, having pulled back from a daily peak of 1.0946 struck during the European session.
The euro benefitted in the aftermath of the Federal Reserve and the European Central Bank () monetary policy decisions. Whereas the first skipped a rate hike after ten consecutive raises, the latter delivered a 25 basis point increase as expected.
Against this backdrop, the EUR/USD climbed to its highest level in a month at 1.0970 on Friday and has been edging slightly lower ever since, still managing to hold up above the 1.0900 critical level.
On Tuesday, US investors rejoined the markets. The US Census Bureau released housing starts data which showed an increase of 21.7% in May, much better than the 0.8% decline expected.
Market participants will be watching Federal Reserve President Jerome Powell’s testimony before both chambers of the US Congress on Wednesday and Thursday.
Other Fed speakers will be crossing the wires this week and could offer signs of whether the central bank will proceed with further rate increases after the dot plot showed most Federal Open Market Committee (FOMC) members expect two more hikes this year.
From a technical perspective, the EUR/USD short-term outlook remains skewed to the upside according to indicators on the daily chart, although momentum has faltered over the last sessions.
A break above last week’s high of 1.0970 could pave the way toward the 1.1000 psychological level on track to the 1.1070 resistance area. On the flip side, the loss of the 1.0900 level could add short-term pressure exposing the 100-day simple moving average (SMA) at the 1.0810 zone.
