EUR/USD consolidates losses with upside attempts capped below the 1.0700 area

• The Euro remains contained above 1.0600 support yet with bullish attempts capped below 1.0690
• The broader bias remains unchanged, with the pair on a bearish trend from early March highs near 1.1000.
• The diverging ECB - Fed monetary policy outlook is expected to keep the pair under pressure.

Euro bears have been contained at 1.0605 support area this week, but the pair remained trading sideways, with upside attempts capped below 1.0690. The pair is on track to close the week little changed, following a 1.8% sell-off in the previous week.

A somewhat softer US Dollar has given the common currency some oxygen on Friday, although the broader bearish trend remains unchanged. The diverging monetary policy outlook between the ECB and the Fed is expected to weigh on the pair.

This week’s data has endorsed the view of a ‘no landing” in the US economy, which is strengthening the case for the Fed’s Hawkish sector. Earlier on Friday, Chicago Fed President Austen Goolsbee reiterated that the progress on inflation has stalled and that it will take longer than expected to achieve the 2% target. The Dollar has reacted with a moderate appreciation.

On the contrary, ECB’s President Lagarde suggested that interest rate cuts will likely come in June. This puts the European Central Bank in the unusual situation of acting ahead of the Fed, which is expected to keep the Euro under pressure.