EUR/USD Analysis: market struggling with dismal news both shores of the Atlantic
EUR/USD Current price: 1.1313
- US inflation rose by less-than-anticipated in May, Fed's rate cut mostly priced in.
- ECB's Draghi warned about the persistent risk related to global trade.
The EUR/USD pair flirted with its early June top, posting a third consecutive higher high at 1.1341, as the market rushed away from the greenback once again, following news coming from China. The PboC surprised speculative interest by setting a higher-than-anticipated reference rate for the Yuan, another measure taken on the back of the trade war between the world's two largest economies. Asian share market's edged lower, moreover as Wall Street closed in the red, while European equities trimmed early gains and are also down. ECB´s Draghi gave the opening remarks at the central bank's conference on Central, Eastern, and South-Eastern European countries, and warned about the headwinds global trade is facing in the recent years, exacerbating the dismal mood but also weighing on the shared currency, which retreated from the mentioned high.
The European macroeconomic calendar had nothing relevant to offer, while the US released first, MBA Mortgage Applications for the week ended June 7, which rose 26.8%, and just now May CPI data. According to the official report, inflation in the US rose by just 0.1% MoM in May and by 1.8% YoY, while the core annual reading came in at 2.0%, all of them slightly below the market's expectations.
The dollar initially reacted negatively to the news, although it quickly changed direction, now trading at its highest for the day against the common currency. The EUR/USD pair, however, keeps holding above the 1.1300 figure, with the upside potential fading short-term, as, in the 4 hours chart, the pair is finding some support around a bullish 20 SMA, while despite easing, technical indicators remain within positive levels. The long-term broken trend line comes in at around 1.1265, the level to break for the pair to turn bearish again.
Support levels: 1.1300 1.1265 1.1220
Resistance levels: 1.1350 1.1385 1.1420
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.
