• EUR/USD remains sidelined after an upbeat start to the likely quiet week.
  • Softer US data, hawkish ECB outshine Fed talks amid light calendar, year-end sluggish sentiment.
  • Firmer yields, recession woes challenge pair buyers, sellers await US PCE Price Index.

EUR/USD seesaws near 1.0600 as it snaps two-day downtrend amid early Monday in Europe.

The major currency pair’s latest inaction could be linked to the cautious sentiment ahead of this week’s US data, as well as mixed concerns surrounding European growth. However, hawkish comments from the European Central Bank (ECB) policymakers and the central bank’s readiness for higher rates keep buyers hopeful.

During the last week, European PMIs have been better than the first readings of the US activity data and bolstered the bullish bias of the ECB policymakers. Additionally, chatters that the bloc’s policymakers may ease control on the oil price cap to get the resolution passed also keep the EUR/USD prices firmer, via hopes of higher oil prices and a stronger need to tame the higher inflation.

It’s worth noting, however, that the higher rates and inflation fears favor the recession woes and underpin the Treasury bond yields, which in turn tease the US Dollar bulls amid a sluggish session. Also likely to have teased the greenback buyers could be the recently hawkish comments from the Fed policymakers, including Federal Reserve Bank of Cleveland President Loretta Mester and New York Federal Reserve President John Williams.

Above all, the year-end consolidation and holiday mood join the light calendar to restrict immediate EUR/USD moves. Even so, the final readings of the US Q3 GDP and the Fed’s preferred version of inflation, namely Friday’s US Core Personal Consumption Expenditures (PCE) – Price Index, expected 4.6% YoY and 5.0% previous readings, will be important to watch for fresh impulse.

Technical analysis

A daily closing beyond the previous support line from November 30, around 1.0640, becomes necessary to convince EUR/USD bulls. Otherwise, a convergence of the 21-DMA and the mid-November peak could challenge the pair sellers near 1.0480.

This article was originally published by Fxstreet.com.Read the original article here.

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