EUR/USD Comes Back to 1.10 Ahead of US Inflation Report

EUR/USD has been bullish as the odds for the FED continuing to raise interest rates further fall and this forex pair approached the major level at 1.10 last week. Although buyers seem reluctant to hold their long EUR/USD positions the closer we get to 1.10.

The ADP and JOLTS jobs reports gave this pair another push last week as the USD declined on weaker figures, but on Friday the positive NFP report improved the sentiment for the USD and we saw a bearish reversal in risk assets. The decline continued yesterday and EUR/USD fell to 1.0830s.

Although the liquidity has been thin due to the Easter holiday and today that traders came back, the decline in the USD has resumed and EUR/USD is heading for 1.10 again. Now this forex pair is trading slightly above the 1.0900 level. The optimism of European indexes, which returned from a long weekend, contributed to the decline in demand for the US Dollar. The Euro was also supported by positive Eurozone data, as the April Sentix Investor Confidence improved from -11.1 in March to -8.7, and Retail Sales in March decreased by 0.8% compared to the previous month as expected, but the year-on-year comparison was slightly better than anticipated.

Although European equities markets initially rose, they later lost some momentum and reduced their gains. This led to some recovery of the US Dollar before the US market opened. Wall Street is expected to open in the negative zone, while government bond yields are hovering around the levels seen at Monday’s closing.