The euro pair remains under pressure today. Today Greenback shows strong progress amid high U.S. 10-year benchmark Treasury yields. High inflation, energy prices and bullish US retail data have made bond yields even higher. Investors are ready for the central bank’s tapering in November, while the European Central Bank (ECB)’s Dovish position weighs on the Euro pair.

Christine Lagarde, president of the European Central Bank (ECB), said current inflation was unlikely to rise, promising that the eurozone would continue to help the economy as the pandemic continues to fall. “Inflation is largely volatile,” she said after presenting at the International Monetary Fund’s annual meeting on Saturday, October 16, 2021. The ECB is “paying very close attention” to wage negotiations and other possible second-round outcomes, which could push prices up more permanently, she said.

The ECB predicts that inflation will cut its target in the medium term before falling to 2022 later this year. “Monetary policy will continue to support the economy in order to sustain inflation at the 2 percent inflation target for the medium term,” Lagarde said. “Once the pandemic emergency is over – it is approaching – our pioneering guidance on rates and property purchases will ensure that monetary policy supports achieving our goal in a timely manner,” Lagarde said.

On the other hand global markets are gearing up for more earnings this week, following a stronger-than-expected start to the earnings season in the U.S. last week. U.S. stock index futures were mostly unchanged during overnight trading on Sunday, after the major averages posted their best week in months last week, amid a positive start to earnings season. In addition to better-than-expected earnings from Goldman Sachs on Friday, positive economic data also boosted the greenback. Retail sales rose 0.7% in September, the Census Bureau said Friday, while economists surveyed by Dow Jones were expecting a decline of 0.2%.

Meanwhile, overnight in the Asia-Pacific region, stocks were mostly trading lower as investors responded to the release of key Chinese economic data showing 4.9% growth in China’s GDP in the third quarter. The 5.2% expansion was below analysts’ expectations in a Reuters poll. Contrary to expectations in a Reuters poll of 4.5%, industrial production fell 3.1% in September, beating expectations.

Elsewhere on the economic data front Eurozone industrial output fell 1.6% in August, following a revised 1.4% growth in July. For now, traders are waiting for U.S. industrial production data and U.S. Fed Quarles Speech for new predictions.

EUR/USD 4 Hour Chart:

Support: 1.1586 (S1), 1.1571 (S2), 1.1555 (S3).

Resistance: 1.1616 (R1), 1.1633 (R2), 1.1647 (R3).

ECB’s Dovish comments and stronger US data weighs on the pair. We expect a bearish trend for EUR/USD.