EUR/USD Analysis: EUR gains as Draghi speaks, US inflation misses

Valeria Bednarik FXStreet

EUR/USD Current price: 1.1672

US inflation came in below expected, putting pressure on the greenback.
ECB revised growth modestly lower, maintained inflation outlook unchanged.

The greenback lost ground Wednesday amid lesser demand on for the perceived safe-haven currency, on the back of decreasing concerns about the trade war between the US and China. The EUR/USD pair peaked at 1.1649 but retreated below a key Fibonacci resistance, entering wait-and-see mode ahead of first tier events. The first one was the ECB that left rates unchanged as expected as largely anticipated, and just now was the turn of US August inflation. According to the official report, core CPI rose 0,1% missing the expected 0.2%, while the annual reading also disappointed, printing 2.2% vs. the expected and previous 2.4%. Weekly unemployment claims for the week to September 7 came in at 204K beating expectations of 210K, while the previous week figure was revised to 205K from 203K, anyway offset by poor inflation figures. The pair peaked on the header, as for ECB's President begins its statement.

The central bank has revised lower its GDP forecast for this year and the next ones, keeping inflation forecast unchanged. In the statement, Draghi expressed concerns about the effects of protectionism measures and repeated that the monetary policy will remain accommodative, even after assets purchases stop.

As the Q&A goes on, the pair trades at fresh weekly highs around 1.1660, finally breaking through the 23.6% retracement of August rally, and with room to extend gains up to that monthly high of 1.1733, particularly if intraday retracements meet buying interest in the 1.1630 region. In the 4 hours chart, the upward momentum is building, with a long candle developing above still directionless moving averages, and technical indicators advancing after a period of consolidation right above their midlines.

Support levels: 1.1635 1.1600 1.1570 1.1530

Resistance levels: 1.1690 1.1730 1.1770

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.

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.