The Euro continues to trade higher against its US counterpart as we enter the European trading session, following on from last Friday’s gains after a speech from US Federal Reserve president Jerome Powell that indicated interest rates in the US will not be changing anytime soon.
Although Mr Powell mentioned that the tapering of the bond buying program, which was introduced to boost the economy to counter the effects of the coronavirus may begin this year, he gave no exact date
He was also quick to point out that the timing of the first interest rate hike will not be connected to the tapering program will begin before any rate hikes which left the market speculating that higher rates in the US are still years away.
The main driver of the EUR/USD currency pair today will be the release of consumer confidence figures from the Eurozone as well as the Harmonized Index of Consumer Price figures from Germany which is the main indicator of inflation from Europe’s biggest economy.
As we can see on the chart, the Euro has once again fun into strong resistance at the $1.1796 level which it last hit around 2 weeks ago, and this level will need to be broken if the Euro is to continue with any meaningful rally.
The key to this will be the results of today’s inflation figures from Germany and a good set of figures may see the Euro break higher to the next resistance level at $1.1830 followed by $1.1845.