EURUSD price holds steady above 1.0200 ahead of German IFO

• EURUSD price is holding the bounce above 1.0200 amid a cautious mood.
• ECB’s Lagarde pledges to continue rate hikes until inflation falls back to 2%.
• The US dollar stalls the bounce, focus now shifts to the German IFO survey.

EURUSD price is struggling to extend the renewed upside above 1.0200, as investors assess global recession risks ahead of the all-important Fed rate hike decision this week.

The US dollar returns to the red after the early march higher, offering some support to the main currency pair. Worries over a global economic slowdown sapped investors’ confidence and fuelled risk-off flows in the opening trades of the week, which helped the safe-haven buck recover ground from over two-week lows reached against its main competitors on Friday.

Traders remain cautious ahead of the earnings reports from the US tech giants, limiting the upside in the spot. Further, stabilizing US Treasury yields and expectations of a 75 bps Fed rate hike this week also act as a headwind to the EURUSD rebound.

Markets also digest the latest comments from ECB President Christine Lagarde, as she said that the central bank will raise its interest rates until inflation falls back to its 2% target. Meanwhile, the ECB hawk Robert Holzmann said over the weekend that "we will see in the autumn what the economic situation is. Then we can probably decide if we do another 0.5% or less."

The immediate focus now shifts towards the German IFO Economic Sentiment data due for release later this Monday. This sentiment data will be key to watch after Friday’s Eurozone and German Preliminary S&P Global business PMIs showed contraction in July, reviving fears over an imminent recession in the bloc. The Italian political turmoil will also likely remain a risk to the shared currency.

EURUSD price technical levels to consider