EUR/USD continues bounce from 1.1300 support, now facing resistance at 21DMA near 1.1350 as Lagarde speaks

• EUR/USD has been ebbing higher after bouncing at 1.1300 level but gains are for now capped by the 21DMA.
• The pair is currently watching remarks from ECB President Lagarde, who has been speaking at the WEF.

After bouncing at support including the 1.1300 level, the 50-day moving average just at 1.1319 and an uptrend that has been supporting the price action going all the way back to late November, EUR/USD has been ambling higher. For now, the 21DMA at 1.1346 has been capping the intra-day gains and at current levels near 1.1340, EUR/USD is trading about 0.3% higher on the session, having now erased all of Thursday’s losses. On the week, the pair still looks on course to lose about 0.6%, mainly as a result of a broad-based dollar rebound following its positioning-related sell-off the week prior.

Fundamental newsflow remains light, with no new notable data releases out of Europe on Friday morning so far and no notable US events aside from a speech from US Treasury Secretary Yellen at 1630GMT. Prior to that, January Eurozone Consumer Confidence figures are out at 1500GMT but are unlikely to result in much euro volatility. The main themes in FX markets at present are 1) central bank tightening and 2) risk-off slows, with the latter, as of late, a function of rising expectations for the former, particularly from the Fed. On the topic of central bank policy, as markets gear themselves up for next week’s Fed meeting (expected to be a hawkish affair), market focus is on comments from ECB President Christine Lagarde. She is currently speaking in an online event put on by the World Economic Forum. For now, she has not said anything new, leaving EUR/USD unmoved.