EURUSD pair has been able to recover from multi-week lows .

After finding support at 1.0700 on Tuesday, the EURUSD pair has mounted a slight recovery on Wednesday. The pair’s near-term technical view indicates that the negative bias is expected to remain in place, although a lengthy rebound may occur if sellers are unable to support 1.0760.

ECB policymakers’ conflicting remarks make it challenging for the EURUSD to gain traction.

European Central Bank (ECB) policymakers’ conflicting remarks on Tuesday made it challenging for the Euro to outperform its competitors. Francois Villeroy de Galhau, an ECB policymaker, claimed that the inflation peak was not far away. Joachim Nagel, a hawkish policymaker, emphasized the need for additional, large rate increases and said that the ECB rates are not yet restrictive. The ECB interns will raise key rates, ECB Executive Board Member Isabel Schnabel concluded in a neutral manner. by 50 basis points (bps) in March, without pledging any more policy action.

FOMC Chairman Jerome Powell, on the other hand, recognized that the January jobs number was better than anticipated. Powell said that if they continue to see good labor market or rising inflation statistics, they could need to do more with rates. However, it doesn’t appear that the chairman’s remarks have had much of an influence on forecasts for rate increases.

The likelihood of two 25 bps rate increases in March and May, according to the CME Group Fed Watch Tool, is roughly 70%, essentially unchanged from before Powell’s interview. On Wednesday, there won’t be any noteworthy macroeconomic data releases, but markets will closely monitor central bank speeches.

President of the New York Fed Williams, an Atlantan Later in the day, remarks will be given by Minneapolis Fed President Kashkari and Fed President Bostic. According to market positioning, the US dollar may continue to strengthen in the event that Fed speech prompts markets to keep pricing in a rate hike in May. On the other hand, a sanguine view for inflation would restrain the currency’s gains and let the EURUSD continue its upward correction.

Technical Analysis

The four-hour chart’s relative strength index (RSI) indicator remains below 50 after emerging from the oversold region around 30, indicating that the recent bounce in the EURUSD is a technical correction rather than the start of a reversal.

The 200-period SMA, the 20-period SMA, and the Fibonacci 50% retracement of the most recent rise all line up as important resistance on the upside around 1.0740. The psychological level, or static level, at 1.0800, and the Fibonacci 38.2% retracement, at 1.0820, might be reached if the pair moves above that level and begins to use it as support.

According to Tuesday’s price movement, the psychological level of 1.0700 (the Fibonacci 61.8% retracement) serves as a powerful support. A four-hour closure below that mark might signal the beginning of a longer drop towards the static level of 1.0645 and the level of 1.0600.