EUR/USD grinds toward 1.1370 amid soft US dollar

• EUR/USD wants more, hovers around 1.1370, USD retreats from a 16-month high.
• EUR/USD bulls remain subdued amid instability in the bond market.
• Traders will look for comments from ECB's Lagarde beside Fed's Waler and Clarida speeches.

EUR/USD is grinding above the critical resistance level, 1.1360, amid broad US dollar weakness. At the press time, the currency pair is trading around 1.1370 during Friday's early Asian-pacific trading session.

In the past two days, the pair has kept the investors entertained as they continue to remain hopeful, despite the possibility of the pair moving southwards. However, the latest European Central Bank (ECB) Governing Council Member Isabel Schnabel's statement has slightly dampened the market sentiments.

On Tuesday, Schnabel had said that the increase in inflation is welcoming news. She also noted that the ECB has continued to buy bonds, which shows that a rate hike is not imminent.

On the other hand, the US dollar has retreated from its 16-month highs and is now trading around 95.50. The jobless claims have hit a new post-pandemic low at 269,000. It has paired with a better-than-expected jump in the November Philly Fed Manufacturing index and has failed to push the US dollar northwards.

Also, instability in the bond market is at par with equity prices on Wall Street. The best situation for the US dollar would be falling equity prices and higher yields. But the opposite should work for the euro. The 10-year US Treasury yield stands at 1.58% after testing the daily low at 1.05%, while the 30-year remains below 2%.

Traders will now eye for Germany's Producer Price Index (PPI) and speeches from European Central Bank (ECB) President Christine Lagarde and German Buba President Dr Jens Weidmann. Fed policymakers will speak in the next 24 hours; traders will gear up for vice Chairman Richard Clarida and Christopher Waller comments.

EUR/USD technical levels