EUR/USD analysis: no "obstruction of justice," dollar soars

Valeria Bednarik FXStreet

EUR/USD Current price: 1.1085

Dollar's sell-off came to a halt this Thursday, but not before reaching fresh monthly lows against most of its major rivals. The EUR/USD pair topped at 1.1171 and drifted down to 1.1103 early US session, helped by stocks paring losses within the American session, and a batch of positive US figures that cooled down the negative sentiment. There were no relevant macroeconomic news in the EU, but the US reported that for the week ended May 12th, unemployment claims fell to their lowest since 1973, down to 232K from a previous unrevised 236K and better than the 240K expected. The Philadelphia Fed Manufacturing index also surprised to the upside, with activity in the region accelerating to 38.8 in May from 22.0 in April.

The dollar advanced further ahead of Wall Street's close, with the pair breaking below the 1.1100 and nearing 1.1080, on market talks doing the rounds that there was no obstruction to justice in the Flynn case, therefore clearing US President Trump from a possible impeachment. There seems to be a video from May 3rd, in where former FBI director Comey said under oath and before the Senate Judiciary Committee, that "he has not been pressured to close an investigation for political purposes."

The EUR/USD pair retains the positive tone, although chances of a downward correction have become bigger, as there's a good chance speculative interest will take profits out ahead of the weekend this Friday. In the 4 hours chart, technical indicators have eased from overbought levels, with the RSI heading lower around 69, while moving averages maintain their strong bullish slopes below the current level, with the 20 SMA acting as immediate support in the 1.1080 region. A bearish correction could extend down to 1.1000, without affecting the bullish dominant trend. A break above 1.1170 should support an upward extension towards a major long term static resistance at 1.1260.

Support levels: 1.1080 1.1045 1.1000

Resistance levels: 1.1120 1.1170 1.1210

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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