EUR/USD stays pressured near 1.0700 as Fed, ECB policymakers defend higher interest rates

• EUR/USD holds lower ground after reversing the corrective bounce before a few hours.
• Both Fed and ECB policymakers appear hawkish but the strong US data, yields help USD to pare previous losses.
• Markets remain dicey amid a lack of major data/events.
• German Inflation, EU economic forecasts and US Weekly Jobless Claims eyed.

EUR/USD remains pressured around 1.0710, following a reversal from 1.0760, as bears keep the reins for the fifth consecutive day during early Thursday. In doing so, the major currency pair justifies the hawkish comments from the European Central Bank (ECB) and the Federal Reserve (Fed) policymakers. It’s worth noting that the comparatively upbeat US data than Europe seems to defend the hawkish comments from the Fed and weigh on the EUR/USD price.

That said, Federal Reserve Governor Christopher Waller teased a long fight with a 2.0% inflation target by citing expectations of tighter monetary policy for longer than expected. On the same line, Governor Lisa Cook said that the central bank remains focused on restoring price stability, as inflation is still running too high. She added that they would need a restrictive monetary policy for some time.

Furthermore, New York Federal Reserve President John Williams said that the labor market is still very strong and noted that they have more work to do on rates, adding data will determine the path of rate hikes.

Elsewhere, ECB policymaker Klaas Knot said that headline inflation appears to have peaked but added that keeping the current pace of hikes into May could well be needed if underlying inflation does not materially abate.

While a slew of Fed and ECB policymakers spoke much about defending the restrictive monetary policy, Friday’s upbeat US jobs report and activity data contrast with the comparatively lighter EU statistics to justify the Fed’s hawkish stand, which in turn exerts downside pressure on the EUR/USD price.

Additionally, a rebound in the US 10-year Treasury bond yields, after a downbeat start to Wednesday, joins Wall Street’s negative closing to weigh on the EUR/USD prices.

Moving on, preliminary readings of Germany’s Harmonized Index of Consumer Prices for January will precede the quarterly prints of European Commission releases Economic Growth Forecasts to entertain EUR/USD traders.

Technical analysis

An 11-week-old ascending support line joins the 50-day Exponential Moving Average (EMA) to highlight 1.0670-65 as the key level for the bear’s conviction.