• US dollar corrects to the downside across the board on Wednesday.
• Euro gains amid comments from ECB officials and data.
• EUR/USD is up for the second day in a row, alleviating bearish pressure.

The EUR/USD is holding onto gains and is testing daily highs around 1.0860 on American hours, supported by a correction of the US dollar across the board.

Dollar finally drops

Comments from European Central Bank officials on Wednesday mentioned the possibility of a rate hike during the fourth quarter, undermining partially Lagarde’s message of last week. German inflation data for March came in above expectations and Industrial Production increased in the Eurozone in February. The comments and the numbers helped the euro.

A new poll suggests a victory for French President Macron against Marie Le Pen, but it warned about voters unwilling to admit their preference for Le Pen. A debate between both candidates is today.

A weaker US dollar also contributes to boosting EUR/USD. A recovery in Treasuries weighed on the dollar. The US 10-year yield dropped to 2.87%, moving away from multi-year highs. Data from the US showed home prices in the US reached a record high in March, although, Existing Home Sales dropped again, showing signs of a slowdown in the sector. Later on Wednesday, the Federal Reserve will release the Beige Book.

The EUR/USD peaked on Wednesday at 1.0866, the highest level in almost a week. It then pulled back, finding support above 1.0820. It remains near the top, with a bullish intraday bias.

Technical outlook