EUR/USD staged a nice rally this week despite little progress in Greek negotiations and the fact that the Federal Reserve left the door open to a June rate hike.
Despite Friday’s pullback, EUR/USD is on track to post its third consecutive weekly gain and with April as its first monthly gain since June 2014. The euro benefited from the decision of Greek Prime Minister Alexis Tsipras to sideline Yanis Varoufakis in the negotiations team with creditors and from short-covering.
The pair scored a 2-month high of 1.1289 before turning lower, but the euro failed to break above the 23.6% retracement of the broader 1.3992-1.0461 drop at 1.1295.
Technically speaking, EUR/USD maintains the bullish tone in weekly charts, suggesting there is more upside room. However, in smaller time frames, indicators are near overbought levels which could limit gains in the upcoming days.
Next week, the nonfarm payrolls report will be the key event driving markets. A batch of disappointing US data has kept the dollar on the defensive during the the past weeks. On Wednesday, Q1 GDP confirmed fears the American economy is slowing as it printed a 0.2% rise, versus 1.0% expected and down from 2.2% in Q4.
Even though the Federal Reserve left options open to the timing of the “lift-off”, blaming on bad weather and “transitory factors” for the growth slowdown, June seems less and less likely at this point, with expectations turning to September for the Fed’s first rate hike in over a decade.
Despite Friday’s pullback, EUR/USD is on track to post its third consecutive weekly gain and with April as its first monthly gain since June 2014. The euro benefited from the decision of Greek Prime Minister Alexis Tsipras to sideline Yanis Varoufakis in the negotiations team with creditors and from short-covering.
The pair scored a 2-month high of 1.1289 before turning lower, but the euro failed to break above the 23.6% retracement of the broader 1.3992-1.0461 drop at 1.1295.
Technically speaking, EUR/USD maintains the bullish tone in weekly charts, suggesting there is more upside room. However, in smaller time frames, indicators are near overbought levels which could limit gains in the upcoming days.
Next week, the nonfarm payrolls report will be the key event driving markets. A batch of disappointing US data has kept the dollar on the defensive during the the past weeks. On Wednesday, Q1 GDP confirmed fears the American economy is slowing as it printed a 0.2% rise, versus 1.0% expected and down from 2.2% in Q4.
Even though the Federal Reserve left options open to the timing of the “lift-off”, blaming on bad weather and “transitory factors” for the growth slowdown, June seems less and less likely at this point, with expectations turning to September for the Fed’s first rate hike in over a decade.
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