EUR/USD climbs above the 1.0500 figure due to a softer US dollar

• The shared currency remains trims some of its weekly losses but remains down 0.21%.
• Hawkish ECB speaking will keep the common currency supported.
• EUR/USD Price Forecast: A double bottom in the 1-hour chart targets 1.0550.

EUR/ÜSD advances above the 1.0400-1.0500 range, and it is trading with gains of 0.68% during the New York session, at around 1.0509 at the time of writing.

ECB speakers and negative US economic data, weighed on the USD

The shared currency is gaining traction as USD buyers book profits after the Federal Reserve’s 0.75% rate hike. Furthermore, worse-than-expected US economic data crossed the wires. US Home Sales for May dropped to their lowest level in a year, and Building Permits contracted by -7%. Additionally, the Federal Reserve Bank of Philadelphia Manufacturing Business Outlook Surve index shrank by -3.3 in June from 5.5 estimations.

ECB speakers have dominated the headlines. Francois Villeroy the Galhau was the first to hit the headlines, commenting that inflation remains higher and is broadening beyond energy prices. Later the ECB Vice-President Luis de Guindos said that inflation expectations in the Euro area were “quite anchored.”

The Bank of Italy President and ECB member Ignazio Visco said that he expects the ECB to hike rates in a gradual and sustained way after September. He added that normalization could continue to be gradual, which could mean 25 or 50 bps rate hikes.

In the meantime, US equities are plunging, depicting a negative market sentiment resulting from the Fed rate hike. On Wednesday, Fed Chair Jerome Powell said that although rate hikes of that size (75 bps) are not common, he reiterated that the July meeting is open for that jumbo rate hike or 50 bps.

Meanwhile, US Treasury yields, albeit heading down, remain steady above the 3% threshold. Contrarily the greenback remains soft, as illustrated by the US Dollar Index, at 104.316, down 0.51%.

EUR/USD Price Forecast: Technical outlook

The EUR/USD daily chart depicts the pair as downward biased unless it recovers the 1.0800 mark. Furthermore, the Relative Strenght Index at 43 remains in negative territory, despite Tuesday’s jump, which propelled the consolidation in the EUR/USD.

The EUR/USD 1-hour chart depicts the pair trading above a double bottom neckline in the near term. However, the last candle shows price exhaustion, and with the Relative Strength Index (RSI) at 67.66 accelerating toward overbought conditions, a pullback towards the neckline around 1.0470 is on the cards. That said, the EUR/USD will find some resistance levels at the R1 daily pivot at 1.0512, followed by the double bottom target at 1.0550.