EUR/USD Forecast: Increased pressure but still in range
|EUR/USD Current Price: 1.0786
- Germany inflation held steady at 0.8% YoY in April.
- US weekly unemployment claims surged by 2.98 million in the week ended May 8.
- EUR/USD at the lower end of its latest range further slides expected once below 1.0760.
The EUR/USD pair is under selling pressure this Tuesday, trading below the 1.0800 level. The American dollar remains stronger against most of its major rivals, underpinned by words from US Federal Reserve’s head, Powell, who dismissed chances of going into negative rates. The greenback is also up amid its safe-haven condition, as worldwide equities trade in the red while government bond yields ease. Meanwhile, US President Trump said that “it’s a great time to have a strong US Dollar.”
Germany published its April inflation figures, with the monthly CPI rising by 0.4%, and the annual reading printing at 0.8%, both meeting the market’s expectations. The Wholesale Price Index, however, plunged, down by 3.5% when compared to a year earlier. The US has just released Initial Jobless Claims for the week ended May 8, which resulted at 2.98 million, worse than the 2.5 million expected. As it has been happening lately, there FX board barely reacted to the headline, although US indexes extended their declines, with the DJIA dangerously close to piercing the 23,000 level.
EUR/USD short-term technical outlook
The EUR/USD pair trades near a daily low of 1.0774, holding at the lower end of its latest range. The pair has been unable to produce a relevant directional movement in the last few days, with selling interest aligned in the 1.0890/1.0900 price zone. To the downside, support stands in the 1.0760 price zone. The 4-hour chart shows that the pair is developing below all of its moving averages, with the 20 SMA gaining bearish strength below the larger ones. Technical indicators have turned south, the Momentum crossing its midline and the RSI heading firmly lower at around 38, in line with further declines ahead.
Support levels: 1.0760 1.0720 1.0680.
Resistance levels: 1.0830 1.0865 1.0890
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