EUR/USD analysis: dollar suffers, but euro too

Valeria Bednarik FXStreet

EUR/USD Current price: 1.0576

The greenback suffered a sharp setback this Thursday, amid comments from US Treasury Steven Mnuchin, who expressed his concerns about the high levels of US debt, while adding that new policies would have a limited impact on the economy during this 2017. Those betting for a "phenomenal" tax reform in the upcoming days also got disappointed, as he also said that "we are committed to passing tax reform. It will be very significant — it's going to be focused on middle-income tax cuts, simplification, and making the business tax competitive with the rest of the world ... That's really our focus. We want to get this done by the August recess." Also, FED's Lockhart was on the wires, defining FED's "fairly soon" as probably meaning the next three meetings.

The EUR/USD advanced up to 1.0594, but settled a couple of pips above the 1.0565 Fibonacci level, as the common currency is being undermined by local political woes. The technical picture shows that the upside potential is well limited, as the intraday recovery stalled short from a daily descendant trend line coming from February 12th high at 1.0828, around 1.0600 for this Friday. In the 4 hours chart, the price stands slightly above a bearish 20 SMA, whilst the Momentum indicator has lost upward strength above its 100 level, whilst the RSI indicator has turned lower, now neutral around 48, all of which suggests that there's not enough buying interest, despite dollar's weakness.

Support levels: 1.0520 1.0470 1.0440

Resistance levels: 1.0590 1.0635 1.0660

View Live Chart for the EUR/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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