EUR/USD: Retreats towards 1.2000 on firmer US dollar
- EUR/USD remains pressured as the US dollar holds Friday’s gains amid a quiet session.
- US Treasury Secretary Yellen pushes for Biden’s plan, Kaplan takes the lead to discuss tapering.
- Sluggish markets amid off in China, Japan await German Retail Sales for March.
- US PMIs for the last month, jitters surrounding Russia, China will also be the key.
EUR/USD sellers attack intraday low of 1.2018 ahead of Monday’s European session open. In doing so, the currency major pair fades the early Asian bounce off a one-week low as the US dollar extends Friday’s run-up.
Although holidays in China and Japan restrict market moves, comments from US Treasury Secretary Janet Yellen and Secretary of State Antony Blinken, not to forget Dallas Fed President Robert Kaplan, helps the US dollar index (DXY) to remain strong around 91.30, the highest since April 22.
While US Treasury Secretary Yellen terms Biden’s plan as much needed while pushing for his tax hike, Secretary of State Blinken shows readiness to keep a tab on China. Further, Fed’s Kaplan becomes the first among the policymakers to show readiness to discuss the tapering.
Not only from the US but New Zealand and the UK also convey concerns over Beijing while Russia and Iran are among others flashing the geopolitical risks.
Elsewhere, the covid woes are strong in Asia but markets stay hopeful as global helps reach India.
Against this backdrop, S&P 500 Futures print 0.30% intraday gains even as off in Asia’s key markets limit the activity.
Moving on, Germany’s Retail Sales for March, expected to recover from -9.0% to -3.1%, will be the immediate catalyst to watch for the EUR/USD traders. Although the figures are likely to recover, the data disappointment will have a larger reaction than otherwise. Following that US PMIs for April and risk catalysts will be crucial for the EUR/USD pair trader to watch.
Read: US Purchasing Managers’ Index April Manufacturing Preview: Let the good times roll
Technical analysis
Only if the EUR/USD crosses the 100-day SMA level of 1.2052 on a daily closing, the bulls can retake control. Alternatively, sellers keep their eyes on a horizontal area surrounding 1.1990 that comprises multiple levels marked since March 11.