EUR/USD to extend its fall towards the 1.2155 mark
|EUR/USD has been edging lower as US yields rise and ahead of US data. Big budget, end-of-month flows and downside momentum all point lower, Yohay Elam, an Analyst at FXStreet, briefs.
See – EUR/USD: Recent shifts in ECB and Fed rhetoric are bearish for the euro – MUFG
Momentum has turned negative
“How far does $6 trillion go? In the short term, a mere press report about President Joe Biden's fiscal 2022 budget is pushing the dollar higher. While stock cheer the prospects of more government investment and faster growth, the specter of larger US debt weighs on bonds. Treasury yields are rising and the greenback follows.”
“Friday features the release of Personal Income, Personal Spending and Core Personal Consumption Expenditure (Core PCE) – the Federal Reserve's favorite gauge of inflation. Economists expect it to surpass the bank's objective of 2% but by how much? If the indicator for May beats estimates – like the Consumer Price Index – the greenback could get another boost.”
“Friday's trading will likely see choppy end-of-month trading. Monday is a bank holiday in both the US and the UK, meaning money managers will be scrambling to adjust their portfolios. As the dollar has been on the back foot during the month, an upside correction cannot be ruled out.”
“Euro/dollar has dropped below the 50 Simple Moving Average on the four-hour chart and momentum has turned negative. Bulls may find some solace in the fact that the currency pair still trades above the 100 and 200 SMAs. Nevertheless, bears are gaining ground.”
“Some support awaits at 1.2155, which provided support last week. It is followed by 1.2105, a cap from earlier in the month. Some resistance is at the recent high of 1.2210, followed by the former triple top of 1.2245.”
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.