Euro rebounds modestly after hitting support levels amid Fed speculation
The euro experienced a slight recovery today after a downturn on Thursday, influenced by lower inflation figures in the European Union and a stronger dollar. Market participants are eagerly anticipating Federal Reserve Chair Jerome Powell’s speeches, which are expected to provide insights into the central bank’s future monetary policy direction.
The single currency had been under pressure due to soft EU inflation statistics that prompted a near 0.8% drop on Thursday. This downward movement came after the euro failed twice to breach the key psychological level of 1.10, finding some support at a Fibonacci retracement mark of 1.0882. Despite the modest rebound, the euro remains under near-term pressure while trading below the crucial threshold of the daily chart’s 10-day moving average (10DMA) at 1.0926.
Traders are keeping a close eye on further pivotal levels, particularly at 1.0818/00, which includes the weekly cloud top and a Fibonacci retracement zone. A decisive break below the Fibonacci resistance at 1.0559 would confirm a bear-trap scenario on the weekly timeframe, which could increase the downside risks for the euro.
