EUR/USD Forecast: Potential gains limited by fear
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UPGRADEEUR/USD Current Price: 1.0576
- A batch of dismal US data spurred risk-aversion, with lower yields weighing on the dollar.
- Wall Street plummeted to fresh one-year lows after briefly recovering post-Fed.
- EUR/USD has room to extend its near-term recovery, but the long-term view is bearish.
The EUR/USD pair trades around 1.0570, up for a third consecutive day. The FX board was quite volatile on Thursday as investors tried to digest the latest announcements from central banks and their implications. The American dollar seesawed between gains and losses after the US Federal Reserve decided to hike rates by 75 bps on Wednesday but plummeted with Wall Street’s opening on Thursday as investors rushed away from stocks and into safety.
Dismal US data further weighed on the greenback, as Initial Jobless Claims for the week ended June 10 printed at 229K, worse than the 215K expected. Also, the Philadelphia Fed Manufacturing Survey contracted to -3.3 vs the 5.5 expected in June, while May Building Permits plunged by 7% and Housing Starts in the same period fell by14.4%.
Meanwhile, Wall Street plummeted. The Dow Jones Industrial Average and the S&P 500 trade at levels last seen in January 2021, while resurgent government bonds resulted in yields falling to the lower end of their weekly range.
On Friday, the EU will publish the final estimates of May inflation figures, while the US will release Capacity Utilization and Industrial Production for the same month. Additionally, Federal Reserve chief Jerome Powell is due to speak, while the Fed will release the Monetary Policy Report.
EUR/USD short-term technical outlook
The EUR/USD pair could extend its bullish correction, although technical readings in the daily chart fall short of indicating substantial gains ahead. Technical indicators continue to recover, although within negative levels. Meanwhile, the 20 SMA provides dynamic resistance at around 1.0640, while the longer moving averages maintain their firmly bearish slopes above it.
The 4-hour chart shows that the rally is fading. Technical indicators lost their upward strength but remain well above their midlines, while the pair retreated from around a flat 200 SMA. The 20 SMA, on the other hand, has turned marginally higher, far below the current level.
Support levels: 1.0545 1.0500 1.0460
Resistance levels: 1.0600 1.0640 1.0685
EUR/USD Current Price: 1.0576
- A batch of dismal US data spurred risk-aversion, with lower yields weighing on the dollar.
- Wall Street plummeted to fresh one-year lows after briefly recovering post-Fed.
- EUR/USD has room to extend its near-term recovery, but the long-term view is bearish.
The EUR/USD pair trades around 1.0570, up for a third consecutive day. The FX board was quite volatile on Thursday as investors tried to digest the latest announcements from central banks and their implications. The American dollar seesawed between gains and losses after the US Federal Reserve decided to hike rates by 75 bps on Wednesday but plummeted with Wall Street’s opening on Thursday as investors rushed away from stocks and into safety.
Dismal US data further weighed on the greenback, as Initial Jobless Claims for the week ended June 10 printed at 229K, worse than the 215K expected. Also, the Philadelphia Fed Manufacturing Survey contracted to -3.3 vs the 5.5 expected in June, while May Building Permits plunged by 7% and Housing Starts in the same period fell by14.4%.
Meanwhile, Wall Street plummeted. The Dow Jones Industrial Average and the S&P 500 trade at levels last seen in January 2021, while resurgent government bonds resulted in yields falling to the lower end of their weekly range.
On Friday, the EU will publish the final estimates of May inflation figures, while the US will release Capacity Utilization and Industrial Production for the same month. Additionally, Federal Reserve chief Jerome Powell is due to speak, while the Fed will release the Monetary Policy Report.
EUR/USD short-term technical outlook
The EUR/USD pair could extend its bullish correction, although technical readings in the daily chart fall short of indicating substantial gains ahead. Technical indicators continue to recover, although within negative levels. Meanwhile, the 20 SMA provides dynamic resistance at around 1.0640, while the longer moving averages maintain their firmly bearish slopes above it.
The 4-hour chart shows that the rally is fading. Technical indicators lost their upward strength but remain well above their midlines, while the pair retreated from around a flat 200 SMA. The 20 SMA, on the other hand, has turned marginally higher, far below the current level.
Support levels: 1.0545 1.0500 1.0460
Resistance levels: 1.0600 1.0640 1.0685
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