The EURUSD currency pair, which is trading at a value of 1.07601, has gained buying interest to counteract the decline it experienced on Monday after reaching a three-week high.

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• EUR/USD picks up bids to reverse the late Monday’s retreat from three-week high.

The pair currently trades last at 1.07601.

The previous day high was 1.0785 while the previous day low was 1.0743. The daily 38.2% Fib levels comes at 1.0759, expected to provide support. Similarly, the daily 61.8% fib level is at 1.0769, expected to provide resistance.

EUR/USD defends the week-start gains around the highest levels since late May, despite retreating from the multi-day top amid late Monday, as Euro bulls brace for the key day. That said, the major currency pair remains on the front foot at around 1.0760 during the early hours of Tuesday’s Asian session.

That said, the quote began the day on a front foot amid broad US Dollar weakness as markets keep expecting no rate hike from the US Federal Reserve (Fed). Challenges to sentiment, however, pared the EUR/USD pair’s daily gains during the US session after a jump in the United States Treasury bond yields joined fears that the Eurozone economy isn’t immune to the slowdown, which in turn could probe the European Central Bank (ECB) hawks soon, if not now.

As per the latest data from the US Treasury Department, a $240 billion deficit could be found, which in turn pushed the officials to issue more bonds. The same drives down the prices of traditional haven and propel the yields. It’s worth noting that the concerns about the Fed’s no rate hike and previously downbeat US data exert downside pressure on the Treasury bond coupons and the US Dollar.

Elsewhere, a study from the San Francisco Fed concluded that wage growth has a very small impact on inflation, which in turn raises doubts about the central bankers’ emphasis on wage cost numbers as a source of information to gauge inflation pressure. The same could allow the Fed to remain hawkish and offer a hawkish halt.

With that in mind, Former Fed vice chair Richard Clarida came out with comments that it may be more difficult to get inflation near 2% than in the past 15 years. Further, “Expect a hawkish skip this week,” Former President of Bosteon Federal Reserve Bank, Eric Rosengren, tweeted early Monday.

It should be noted that the recently downbeat Eurozone growth data and early signals for inflation haven’t been positive even if most of the ECB Officials tried to defend the hawkish moves, which in turn raised doubts on the capacity of the bloc’s central bank to fuel the rates. That said, market players put heavy bets on the ECB’s 0.25% rate hike on Thursday.

Hence, today’s final readings of Germany’s Harmonized Index of Consumer Prices (HICP) for May, expected to confirm 6.3% YoY, and ZEW Survey data for June, together with Eurozone ZEW figures, will be eyed closely for clear directions. However, major attention will be given to the US Consumer Price Index (CPI) figures for May as the Fed decision looms on Wednesday, as well as the market forecasts of witnessing no change in the Core CPI MoM figure of 0.4%.

Also read: US Inflation Preview: Why the US Dollar is more likely to fall than rise, three scenarios

A convergence of the 100-day and 21-day Exponential Moving Average (EMA), around 1.0770 at the latest, restricts short-term EUR/USD upside.

Technical Levels: Supports and Resistances

EURUSD currently trading at 1.076 at the time of writing. Pair opened at 1.0749 and is trading with a change of 0.10% % .

The pair is trading above its 20 Daily moving average @ 1.0759, below its 50 Daily moving average @ 1.0885 , below its 100 Daily moving average @ 1.0808 and above its 200 Daily moving average @ 1.052

The previous day high was 1.0785 while the previous day low was 1.0743. The daily 38.2% Fib levels comes at 1.0759, expected to provide support. Similarly, the daily 61.8% fib level is at 1.0769, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1.0733, 1.0717, 1.069
• Pivot resistance is noted at 1.0775, 1.0801, 1.0817

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