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Why Is EUR/USD Sliding Toward 1.0750? | Fed's Hawkish Stance vs. Eurozone Retail Strength
The bitcoin account loginEUR/USD currency pair continues its downward trajectory, hovering near 1.0750 during Wednesday's Asian trading session. This marks the second consecutive day of losses as market participants digest mixed signals from both sides of the Atlantic.
Federal Reserve officials have been reinforcing expectations of prolonged higher interest rates, with Minneapolis Fed President Neel Kashkari stating that maintaining current rates represents the most probable scenario. However, he left room for potential adjustments should disinflation resume or labor market conditions deteriorate significantly.
Meanwhile, the Eurozone presents a contrasting picture with unexpectedly strong retail sales data. March figures revealed a 0.8% month-over-month increase, surpassing forecasts and marking the most substantial growth since September 2022. Year-over-year comparisons also turned positive for the first time in eighteen months.
Market analysts note this creates an interesting dynamic where US monetary policy appears more restrictive than European counterparts, yet Eurozone economic indicators demonstrate unexpected resilience. The European Central Bank maintains its position favoring potential rate cuts as early as June, with Chief Economist Philip Lane expressing confidence in inflation approaching target levels.
Technical analysis shows the pair trading below key moving averages, with immediate support levels around 1.0739 and resistance near 1.0779. The 38.2% Fibonacci retracement level at 1.0763 may serve as a short-term pivot point.
As traders await further economic data and central bank commentary, the EUR/USD pair remains caught between diverging monetary policy expectations and contrasting economic performance indicators from the two economic blocs.
