EUR/USD analysis: comfortable at yearly lows, waiting

EUR/USD Current price: 1.1797

  • US Treasury yields are no longer triggering automatic dollar's demand.
  • EU and US macroeconomic calendar didn't provide fresh clues but highlighted the ongoing economic imbalances.

Trading around the EUR/USD pair was quite choppy this Thursday, with the pair confined to a limited range around the 1.1800 figure. Market players pared compulsive buying of the greenback based solely on rising yields but were also unwilling to get rid of their USD longs. The macroeconomic calendar offered minor readings from both economies this Thursday, starting with the EU Construction Output which fell by more than expected, down in March 0.3%. The US published its weekly unemployment claims, which were slightly above expected, reaching 222K in the week ended May 11th vs. the 215K expected, although the Philadelphia Fed Manufacturing Survey for May surprised to the upside, printing a solid 34.4. Data didn't spur action but confirmed the scenario that triggered the dollar's rally a few weeks ago.

This Friday, Germany will release its April PPI, while the EU will publish March current account and trade balance figures, none of them a big price influencer. The US will only offer speeches from FOMC officials, neither expected to surprise.

Despite US Treasury yields reached fresh multi-year highs, the EUR/USD pair held above the 1.1763 yearly low achieved on Wednesday, maybe anticipating an upward correction for this Friday, exacerbated by profit-taking ahead of the weekend. Technically, the pair is still bearish as in the 4 hours chart, indicators aim modestly higher, but hold near oversold readings and below their early peaks, while the pair develops far below bearish moving averages, with the 20 SMA now around 1.1850. The pair will have to room to extend its corrective movement on a break above this last, although sellers are still waiting to add to shorts on peaks.

Support levels: 1.1765 1.1740 1.1710

Resistance levels: 1.1850 1.1880 1.1925

View Live Chart for the EUR/USD

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