EUR/USD: The ingredients are in place for a fresh rise to the May high at 1.2266
|A necessary correction before the next move higher? That seems the most likely path for EUR/USD, according to Yohay Elam, an Analyst at FXStreet. The pair has been paring its gains related to Fed dovishness but an attack on 1.2266 may be coming.
A fading out of inflation concerns and optimism about Europe could push the euro back up
“Atlanta Fed President Raphael Bostic and his colleague from Chicago Charles Evans are set to speak today and given their previous statement, they will likely remain dovish and weigh on the dollar.”
“There are reasons to be cheerful for the prospects of the old continent. Markit's preliminary eurozone PMIs for May showed robust growth while the Unemployment Rate surprised by remaining at 8% in April. Inflation also marginally exceeded expectations in the old continent.”
“On the vaccination front, Europe is accelerating its campaign while the jabbing pace in the US has slowed down markedly. COVID-19 cases have been falling sharply, nearly catching up with the low levels in the US.”
“Support awaits at the round 1.22 level, which capped EUR/USD last week. It is followed by 1.2175, which was a cushion last week, followed by 1.2160 and 1.2130.”
“Resistance is at 1.2255, which was the high point on Tuesday. It is followed by 1.2266, May peak – and an upside target for the pair. Next, 1.23 awaits bulls.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.