EUR/USD peaked at 1.0750 after ECB comments and US dollar weakness

• The EUR/USD pair is rising on the back of dollar weakness and hawkish ECB rhetoric.
• Federal Reserve Chairman Jerome Powell’s speech on Tuesday provided no guidance ahead of the US CPI report.
• EUR/USD Price Analysis: A break/closure above 1.0770 will pave the way for a test of 1.0800

The Euro resumed its bullish trend against the US Dollar (USD). It reached a new eight-month high around 1.0776, pending the publication of the Consumer Price Index (CPI) in the United States, which is expected to slow. Hence, EUR/USD is trading at 1.0759 after hitting a daily low of 1.0725.

The Euro rose amid hawkish comments from the European Central Bank and its predictions that inflation in the US will subside

Wall Street continues to recover, awaiting the release of the US Consumer Price Index. The lack of US economic data and an irrelevant speech by US Federal Reserve (Fed) Chairman Jerome Powell on Tuesday left the EUR/USD pair far behind. Amid speculation that US inflation will subside, which could pave the way for a less aggressive Fed. As a result, the EUR/USD rose strongly.

Apart from this, the The EUR/USD got a boost thanks to the upbeat comments from several European Central Bank officials (European Central Bank). On Tuesday, Isabelle Schnabel of the European Central Bank stated that “Interest rates still have to go up significantlyand that “inflation will not subside on its own.” On Wednesday, the Governor of the Bank of France and a member of the European Central Bank’s Governing Council, François Villeroy, stated that The European Central Bank should reach its final interest rate in the summer.

Later, Austrian Central Bank Governor Robert Holtzmann added that “rates must rise further to reach restrictive levels sufficient to ensure a timely return of inflation to target,” echoing some of his comments by Olli Rehn, who added that Rates should go up “significantly” in the next two meetings and reach restrictive levels to mitigate inflation.

On the US economic agenda, the Consumer Price Index (CPI) will be published on Thursday, with estimates of 0% on a monthly basis and 6.5% annually. Core CPI will come in at 0.3% MoM, while the annualized estimate is 5.7%.

EUR/USD Price Analysis: The Technical Perspective

From a daily chart perspective, EUR/USD’s breach of weekly highs around 1.0750 opened the door to test June 2022 highs of 1.0773. Once this level is broken, EUR/USD can test the number 1.0800 Short-term. This scenario is supported by the Relative Strength Index (RSI) which is in the bullish territory and heading higher, although the rate of change (RoC) indicates that the volatility remains unchanged. Therefore, the EUR/USD may continue to advance steadily or consolidate.

On the other hand, if the EUR/USD fails to breach 1.0800, the pair will be exposed to selling pressure, which may lead the pair to drop to 1.0750followed by a test of the daily low on January 10 at 1.0711 and round level 1.0700.

Technical levels of the EUR/USD pair