Forexpros – The euro pared gains against the U.S. dollar on Tuesday, amid cautious trade ahead of the start of Federal Reserve Chairman Ben Bernanke’s testimony on the economy later in the session.
EUR/USD pulled back from 1.2316, the pair’s highest since July 10, to hit 1.2283 during European afternoon trade, still up 0.10%.
The pair was likely to find support at 1.2174, Monday’s low and near-term resistance at 1.2332, the high of July 10.
The euro remained supported ahead of testimony by Fed Chairman Ben Bernanke later Tuesday and Wednesday, amid ongoing speculation over whether the U.S. central bank will introduce more easing to stimulate growth.
Expectations for another round of quantitative easing were boosted on Monday after official data showed a third consecutive monthly decline in U.S. retail sales in June.
In the euro zone, Spain saw short-term borrowing costs fall at an auction of 12 and 18-month government bonds earlier, but the yield on the country’s 10-year bonds was at 6.81%, remaining close to the critical 7% threshold amid sustained concerns over the country’s finances.
Meanwhile, data showed that German economic sentiment deteriorated for the third consecutive month in July, as concerns over the euro zone’s ongoing debt crisis continued to weigh.
The ZEW Centre for Economic Research said that its index of German economic sentiment fell to minus 19.6 in July from June’s reading of minus 16.9, but was slightly better than expectations for a decline to minus 20.0.
The euro pushed higher against the pound and the yen, with EUR/GBP easing up 0.13% to 0.7858 and EUR/JPY gaining 0.39% to trade at 97.15.
Also Tuesday, the U.S. was to publish official data on consumer price inflation, as well as reports on the capacity utilization rate and industrial production.
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