The EURUSD maintains the recovery momentum as we approach the end of the NA session backed by the dovish comments from Philadelphia Fed President Patrick Harker. At the moment, the pair is at 1.0670, where it closed the previous week.
Fed’s Harker repeated his view on the rate hike path by suggesting that the Fed should plan to raise the rates twice more this year. While responding to questions from the reporters, he also added that possibly by the end of this year or the beginning of next year would be an appropriate time to stop reinvesting (maturing assets), but that’s all dependent on how the economy evolves between now and then, as per Reuters reports.
Hurt by the dovish tone, the greenback – tracked by the US Dollar Index – slipped back into the red. As of writing, the index is down 0.06% at 100.36.
Karen Jones, Head of FICC Technical Analysis at Commerzbank, notes that the cross last week failed at its 200 day ma and sold off to its the 55 day ma at 1.0675, which is being eroded currently. Rebounds from here are likely to be pretty tepid and we look for losses to the base of the short term channel at 1.0580. Intraday rallies are indicated to now remain capped by 1.0730. A close above the 200 day ma would put the 1.0978/50% retracement back on the agenda.