EUR/USD Analysis: bulls losing conviction, bears still cautious
|EUR/USD Current price: 1.1288
- Dollar gets the advantage in a risk-averse environment.
- EUR/USD downward potential to increase if below 1.1260.
The EUR/USD pair trades just below the 1.1300 level, marginally lower daily basis although still moving in a dull fashion. Risk aversion returned following softer-than-expected US inflation figures released Wednesday, later exacerbated by US President Trump´s comments on the country's trade relationship with China, as he said that he has no deadline for making a deal, yet also that more tariffs are coming. It's all in his head, according to Trump. The dismal market mood, again related to fears about a global economic downturn, doesn't reflect in equities, surging in Europe and poised to open with gain in the US, as oil prices are roughly 3.0% higher, giving them an unexpected boost. Crude oil prices are sharply up, following news indicating two oil tankers were reportedly hit by blasts in Gulf of Oman. The so far unclear incident fueled concerns about disruption to supplies from the Middle East, making the commodity bounce and dragging indexes alongside.
In the data front, Germany released May inflation data, which came in as anticipated and matching the previous estimates, triggering no reaction in the EUR. As for the US, the country released weekly unemployment claims, which disappointed, rising to 222K in the week ended June 7, and Import and Export Prices, which fell by more than anticipated in May. The figures passed unnoticed in terms of price action.
The pair trades near its weekly lo of 1.1282 and while the potential upward keeps fading, technical readings are far from indicating a steeper decline, particularly as the pair remains above the broken descendant trend line, currently at 1.1260. So far, seems the pair is heading toward it, and its behavior once the line is reached, could be critical mid-term. In the short term, the 4 hours chart shows that the pair has spent the day comfortably consolidating below a directionless 20 SMA, while still holding above the larger ones, which maintain their bullish slopes. Technical indicators in the mentioned chart stand within negative ground, although failing to provide clear directional clues.
The bearish case will be firmer should the pair losses the 1.1260 level, as the bullish case has already lost adepts.
Support levels: 1.1260 1.1220 1.1180
Resistance levels: 1.1310 1.1350 1.1385
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