The EUR/USD pair is back under pressure during the New York session, having already filled an upward gap left at the weekly opening.
The euro-dollar opened the week positively and reached a high of 1.0933, but the upward move lacked follow-through. As a result, the EUR/USD fell back below the 1.0900 mark and currently trades around 1.0880, virtually unchanged from Friday’s close.
On Monday, the risk-averse environment continued to underpin the greenback and US yields while pressuring global stocks. The yield on the United States 10-Year note rose to 2.784%, its highest level in more than three years, while the one on the United States 30-Year bond reached 2.824%.
The uncertainty surrounding the Russia – Ukraine conflict and hawkish stances from central banks, and recession fears have kept US yields and the dollar on demand.
Meanwhile, Emmanuel Macron and Marine Le Pen will go to a second-round vote to define the French presidential election, adding caution to the picture. On the data front, The US will release March’s consumer price index on Tuesday, which is expected to show an annual rate of 8.5% and could affect expectations about the Fed’s next decision.
The EUR/USD holds a bearish perspective according to technical indicators in the daily chart. However, the RSI has turned flat below its mid-line, reflecting the loss of bearish momentum.
At the same time, the EUR/USD price trades below its main moving averages, with the 20-day SMA offering immediate resistance around 1.0995, followed by 1.1070 and then the 1.1150 area.
A test of the YTD low at 1.0805 is still in the cards as long as the euro fails to regain the 1.1150 zone, representing the 23.6% retracement of the May 2021 - March 2022 decline. A break below this level could pave the way to the 1.0727 area, April 2020 monthly low.