The EUR/USD pair struggled to make a decisive move on Tuesday and ended the day slightly above the 1.0300 mark as a cautious market mood, and mixed signals from ECB members kept the euro’s upside limited.
At the time of writing, the EUR/USD pair is trading at the 1.0303 zone, 0.6% above its opening price. The euro managed to advance to a daily high of 1.0308 during the New York session.
On Monday, Philip Lane, ECB Executive Board member, argued in favor of a smaller interest hike in the following December meeting of the Governing Council, claiming “One platform for considering a considerable hike, such as 75 basis points, is no longer there.”
However, he didn’t signal a stop of the hiking cycle but rather a contraction at a slower pace and at the appropriate time. On the other hand, Austria’s central bank governor Robert Holzmann claimed that there is no evidence of price pressures easing and that inflation expectations need to be well anchored.
In that sense, he called for another big rate rise in December to send a strong message and prove the bank’s determination to fight inflation. Meanwhile, the U.S. dollar, measured by the DXY index, snapped a three-day winning strike and fell back to the 107.15 area.
On Wednesday, the FOMC’s latest meeting minutes will be released, which could shed some light on whether or not the Federal Reserve braces for a policy pivot in December.
From a technical perspective, the EUR/USD short-term bias remains tilted to the upside as indicators remain positive on the daily chart. At the same time, the price consolidates at the top of its recent range and above the 20- and 100-day SMAs.
On the upside, the immediate resistance level is seen at the weekly highs at around 1.0330, followed by the 200-day SMA at 1.0400. A break above the latter could improve the euro’s short-term perspective and pave the way to the 1.0500 area.
On the other hand, the next support level could be faced at the 1.0220-00 area, followed by the November 11 low of 1.0163 and the 20-day SMA, currently at 1.0110.
