EUR/USD bulls struggle around mid-1.0700s, focus on ECB talks, Fed Chair Powell

• EUR/USD retreats from intraday high, fades bounce off one-month low amid sluggish session.
• Cautious optimism, mixed concerns surrounding Fed, ECB probe Euro traders.
• Policymakers from ECB, Fed could entertain traders but major attention will be given to the yields and risk catalysts.
• Pair sellers will seek confirmation of recently hawkish bias for the US Dollar, upbeat yields.

EUR/USD fades the early Asian session recovery by retreating from the daily top. Even so, the major currency pair clings to the first daily gains in four around 1.0740 during early Tuesday in Europe.

The quote’s latest retreat could be linked to the fresh uptick in the US Dollar Index (DXY), following a downbeat start of the day. It’s worth noting that the DXY jostles with the 50-DMA amid an inactive session ahead of the key central speeches, mainly from Europe and the US.

Other than the pre-event anxiety and the light calendar, the DXY’s bounce off the intraday low traces the US Treasury bond yields. That said, the benchmark 10-year Treasury yields pick up bids to reverse the initial pullback but stay mostly inactive near 3.62% by the press time.

The comments favoring hawkish actions from the Federal Reserve (Fed) officials and receding recession woes surrounding the US, as per Federal Reserve Bank of Atlanta President Raphel Bostic, US Treasury Secretary Janet Yellen and President Joe Biden, also probe the EUR/USD bulls.

It’s worth noting, however, that the strong points of the Eurozone Sentix Investor Confidence index, Retail Sales and German Factory Orders fail to put a bid under the EUR/USD prices as the ECB policymakers appear a bit less hawkish than their Fed counterparts. On Monday, European Central Bank (ECB) policymaker Robert Holzmann said that the risk of doing too little dwarfs the risk of the over-tightening policy.

Against this backdrop, US stock futures print mild gains and the equities in the Asia-Pacific region remain sidelined, which in turn keeps the EUR/USD buyers hopeful ahead of speeches from the ECB and the Federal Reserve (Fed) officials. Also important to watch will be US President Joe Biden’s State of the Union (SOTU), not to forget Germany’s Industrial Production for December.

Technical analysis

EUR/USD bears remain hopeful unless witnessing a clear downside break of an ascending trend line from early November, around 1.0850 by the press time.