The EUR/USD pair failed to secure early intraday gains and finished Thursday lower as hawkish comments from Fed Chair Jerome Powell lifted Treasury yields and the greenback during the American afternoon.
The shared currency had risen on the back of comments from European Central Bank Vice President Luis de Guindos, who hinted at the possibility of a first rate hike in July.
However, ECB President Christine Lagarde couldn’t live up to expectations at an IMF panel in Washington. She said inflation must be addressed “in a gradual way,” which, in contrast with Powell's comments, sent EUR/USD back below 1.0850.
Powell signaled that a 50 bps rate hike in May was likely. He said,
“It is appropriate in my view to be moving a little more quickly,”
This triggered a selloff in stocks and a jump in U.S. yields.
As for the EUR/USD, the pair maintains the short-term negative perspective, according to technical indicators in the daily chart. The price failed to consolidate above the 20-day SMA, all of which favor a downward move.
The RSI and the MACD remain in bears territory, although turning flat, reflecting the dwindling selling momentum.
The EUR/USD would need a break below the 1.0800 to bring the bearish momentum back and expose YTD lows at 1.0757 ahead of the 1.0700 psychological level and March 2020 low of 1.0635.
On the other hand, immediate resistance remains at the 20-day SMA, around 1.0916, followed by 1.0940 and then the 1.1000 level.