• EURUSD alternates gains and losses near 1.0370.
• The dollar also appears marginalized amid flat returns.
• ECB Lagarde reiterated that further rate hikes are in store.

The absence of a clear orientation prevails around the European currency and encourages EURUSD hover around the 1.0370 region at the end of the week.

EURUSD bypasses Lagarde comments

EURUSD trades inconclusively amid the greenback’s equally wavering price action and alternating trends in risk appetite on Friday.

In what was the euro zone’s landmark event, European Central Bank (ECB) President Christine Lagarde reiterated in a speech to the European Banking Congress that the central bank plans to further raise rates, adding that the risks of a recession have increased. Furthermore, she suggested that fiscal policy should be temporary and targeted.

In the German debt market, 10-year Bund yields add to Thursday’s rise and flirt with the 2.10% region, in line with the bullish bias seen in their US counterparts.

With no releases from the Eurozone, the focus should shift to the US story, where the Conference Bureau’s leading index and existing home sales will take center stage along with the President’s speech. Boston Fed, Susan Collins.

What to look for around the EUR

EURUSD is trading in a tight range amid the widespread indecision in global markets, still below 1.0400 and with the 200-day simple moving average (SMA) at 1.0411.

In the meantime, the price action around the European currency should closely monitor the dynamics of the US dollar, geopolitical concerns and the divergence between the Fed and the ECB. Additionally, the markets reassessment of a potential Fed policy pivot has become the sole source of the pair’s strong advance in recent sessions.

Coming back to the Eurozone, growing speculation of a possible recession in the region – which seems supported by declining confidence indicators as well as an incipient slowdown in some fundamentals – appears to be the main headwind to which the Euro will face in the short term.

Main events in the euro zone this week: ECB Lagarde (Friday).

Significant problems on the rear boiler: Continuation of the cycle of ECB increases against increased risks of recession. Impact of the war in Ukraine and the continuing energy crisis on the region’s growth and inflation prospects.

EURUSD levels to watch

So far the pair is gaining 0.10% to 1.0371 and facing the next hurdle at 1.0411 (200 day MMS) ahead of 1.0481 (15 November monthly high) and finally 1.0500 ( round level). On the other hand, a break of 1.0023 (100-day MMS) would target 0.9935 (10th November low) en route to 0.9730 (3rd November monthly low).