EUR/USD reclaims 1.1000 amid broad US Dollar strength and hawkish Fed

• On Tuesday, the shared currency trims some of Monday’s losses, up some 0.07%.
• Risk appetite increased, despite continuing advance of the Russia-Ukraine conflict and a hawkish Fed.
• EUR/USD Price Forecast: Downward biased below the 1.1100 mark.

After two days of losses in the North American session, the shared currency climbs amid a risk-on market mood and a firmer greenback. At the time of writing, the EUR/USD is trading at 1.1025.

The financial market sentiment is upbeat, as reflected by global equities. The greenback is almost flat during the day, as portrayed by the US Dollar Index, which after reaching the 98.97 daily high, retreating towards 98.489, for a minimal 0.01% gain. Meanwhile, US Treasuries keep advancing for the second consecutive day, led by the 10-year benchmark note, which gains six basis points, sitting at 2.377%.

Fed and ECB speaking grab the headlines

On Monday, Fed’s Chief Jerome Powell said that the US central bank would take the “necessary steps”  to tame inflation down towards the 2% target. He emphasized that he favors 50 basis points increases, pretty much aligned with what other Fed policymakers have said.

On Tuesday, Fed speakers continued. St. Louis Fed’s James Bullard said that the Fed needs to get policy-neutral, saying that “faster is better” and reiterated that 50 basis points increases would be in the mix.

Later, San Francisco Fed’s Mary Daly said that inflation is too high, and two supply chain shocks push it “much higher.” She added that it is time to eliminate accommodation, marching up to neutral and determining if the US central bank would need to go above it, as she does not see inflation at 2% by 2022.

Elsewhere, the Eurozone economic docket featured some European Central Bank (ECB) speakers. ECB’s Luis de Guindos said that the possibility of stagflation could be dismissed. Later in the European session, Francois Villeroy said that the ECB should take a cautious approach to normalizations while it needs to focus on underlying medium-term prices.

Meanwhile, ECB’s President Madame Lagarde said that bottlenecks, energy, and food were pushing short-term inflation and added that the Ukraine war would have growth consequences in the Euro area.

EUR/USD Price Forecast: Technical outlook

The EUR/USD bias is downwards, though, on Tuesday, the EUR/USD jumped off from daily lows around 1.0969 and broke above the 1.1000 mark, exposing the mid-line between the top and central Pitchfork’s parallel lines around 1.1080-90. Nevertheless, the downtrend remains intact unless EUR/USD bulls push the pair above the 1.1100 mark, which could pave the way for further gains.

The EUR/USD first support would be the 1.1000 mark on the downside. Breach of the latter would expose Pitchfork’s central parallel-line, which also confluences near the 1.0900 mark, that once cleared would open the door towards March 7 YTD low at 1.0806.