EUR/USD Analysis: market unsure on what to do with the greenback on a risk-favorable scenario

EUR/USD Current price: 1.1299

  • News reporting ECB declining growth´s perspectives weighed on the shared currency.
  • US Indexes poised to open sharply up and at fresh yearly highs.

The EUR/USD pair remains afloat thanks to a sudden bout of risk appetite mid-European morning that sent European indexes sharply up and Wall Street's futures to fresh yearly highs.  The pair bounced from a daily low of 1.1279 that came following headlines that several ECB policymakers think that the bank’s economic projections are too optimistic as growth weakness in China and trade tensions persist, raising doubts about growth in the second half of the year. Furthermore, policymakers are said to lack enthusiasm for sub-zero tiering.

 In the data front, the German ZEW survey gave a light of hope, as economic sentiment improved in the country and the Union, with the index printing 3.1 and 4.5 respectively in April, largely surpassing market's forecasts. Current Conditions in Germany, however, declined sharply, down to 5.5  vs. the 8.0 expected and the previous 11.1. According to the official report, the slight improvement was largely based on the hope that the global economic environment will develop less poorly than previously assumed.

Sentiment is leading the way in the absence of first-tier data and so far, market players are unsure whether the solid rally in US equities will require an increased demand for the greenback.

From a technical point of view, the pair tested the key 1.1280 support area before bouncing some,  battling with the 1.1300 level and still capped by a Fibonacci resistance and its recent highs around 1.1310/20. In the 4 hours chart, technical indicators declined further within positive ground, while the price briefly pierced a bullish 20 SMA, now back above it. The risk is skewed to the downside, yet further slides should be confirmed on another attempt to break below the mentioned 1.1280 price zone.

Support levels: 1.1280 1.1245 1.1200      

Resistance levels: 1.1320 1.1350 1.1385

View Live chart for the EUR/USD

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.

Analysis feed

Latest Forex Analysis

Editors’ Picks

AUD/USD: Fresh lows, channel support tested, Golden Ratio in focus

Bears taking out the H&S neckline, target channel support/uptrend at 0.6829. Failures of the channel open risk to 61.8% Fibo and then 0.6755 November low. The risk-off mood in Asia not helping bull's case ahead of key data and an expected rate cut from a dovish RBA.


USD/JPY drops to weekly low near 109.80 as fears of SARS return remain in focus

USD/JPY extends the previous day’s losses to 109.80, the weakest since January 07, while entering the Asian session on Wednesday. The pair registered heavy losses on Tuesday as news of China’s virus outbreaks gone viral.


Coronavirus FX Selloff, CAD Prime for Bank of Canada Breakout?

The most influential story for the financial markets today was reports that the first US case of corona virus has been confirmed. This deadly virus is spreading across the globe creating concerns about the impact on travel and consumer spending.

Read more

Gold: Stays below $1,560 following Tuesday’s bearish spinning top

Gold remains on the back foot while trading around $1,556.90 during the Asian session on Wednesday. The yellow metal portrayed a bearish candlestick formation, backed by bearish MACD, during the previous day.

Gold News

GBP/USD: Aims to revisit 200-hour SMA, immediate support trendline

GBP/USD registers mild losses while trading around 1.3045 during Wednesday’s Asian session. The pair earlier reversed from 50% Fib retracement of its fall from Jan 07 to 14. A two-week-old falling trend line adds to the resistance.


Forex Majors