EUR/USD retreats below 1.0850 and turns negative on the day

• EUR/USD recovery attempt fails near 1.0900 and pulls back to the lower range of 1.0800.
• The euro loses ground on US dollar strength after Fed Powell’s comments.
• Longer-term EUR/USD remains rangebound, trapped between 1.0770 and 1.0900.

The euro recovery attempt from 1.0830 observed during the European session has been caped right below 1.0900 before pulling back during the US trading session. The negative market mood and Fed Powell’s comments have offered support to the US dollar, pulling the common currency down to session lows.

The euro loses ground after Fed Powell’s speech

The EUR/USD appreciated to one-week highs at 1.0896 earlier today, fuelled by a moderate optimism as the European economies prepare to gradually lift COVID-19 restrictions.

The uptrend, however, has been capped by Federal Reserve President Fed Powells speech. Powell has dismissed market rumours about the possibility of negative interest and has warned about a sustained economic downturn caused by the pandemic, increasing dollar bids.   

EUR/USD remains sideways, without clear direction

From a longer-term perspective, the pair remains trading within a horizontal range, supported above 1.0770 (May 7 low) and below here, 1.0725 (April 24 low) and 1.0635 (March 20, 23 lows). On the upside, immediate resistance lies at 1.0895 (Intra-day high) and above here, 1.0925 (May 5 high) and 1.1020 (May 1 high).