EUR/USD Approaches 1.0700 Lifted By Lagarde’s Hawkish Comments
The EUR/USD pair pushed higher on Monday and struck a fresh one-month high as the dollar remained on the defensive amid a broader correction, while the shared currency benefited from hawkish comments from European Central Bank President Christine Lagarde.
President Lagarde hinted at a probable rate hike in July while suggesting that rates could be in the positive territory at the end of Q3. She also noted that disinflationary dynamics that prevailed during the last decade are unlikely to be seen again.
The euro found an additional tailwind in the uptick in the German 10-year Bund yields, which are advancing for the first time in four days.
The EUR/USD pair peaked at 1.0697 during the New York session and currently trades at the 1.0685 area, up more than 1.1% on the day.
From a technical viewpoint, the short-term outlook for the EUR/USD has turned positive as the price trades at its highest since April 26. The RSI has gained a positive slope, crossing above its midline, while the MACD signals increasing buying interest.
Against this backdrop, the continuation of the upward corrective move appears likely in the very near term at least. The next bullish target is seen at the 1.0750 area, ahead of a descending trendline drawn from February highs, currently at 1.0850. A break above this latter would be a constructive signal for the euro.
On the other hand, immediate support is offered by the 20-day SMA at 1.0530, followed by the 1.0470 zone and the 1.0400 psychological level.
President Lagarde hinted at a probable rate hike in July while suggesting that rates could be in the positive territory at the end of Q3. She also noted that disinflationary dynamics that prevailed during the last decade are unlikely to be seen again.
The euro found an additional tailwind in the uptick in the German 10-year Bund yields, which are advancing for the first time in four days.
The EUR/USD pair peaked at 1.0697 during the New York session and currently trades at the 1.0685 area, up more than 1.1% on the day.
From a technical viewpoint, the short-term outlook for the EUR/USD has turned positive as the price trades at its highest since April 26. The RSI has gained a positive slope, crossing above its midline, while the MACD signals increasing buying interest.
Against this backdrop, the continuation of the upward corrective move appears likely in the very near term at least. The next bullish target is seen at the 1.0750 area, ahead of a descending trendline drawn from February highs, currently at 1.0850. A break above this latter would be a constructive signal for the euro.
On the other hand, immediate support is offered by the 20-day SMA at 1.0530, followed by the 1.0470 zone and the 1.0400 psychological level.
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