|

EUR/USD analysis: pressure mounts despite better news

EUR/USD Current Price: 1.1202

  • Tensions between China and the US persist, although the US announced it would delay car tariffs.
  • European data matched the market's forecast, US one disappointed.

Currencies seesawed alongside sentiment this Wednesday, with the EUR/USD pair falling to 1.1177, its lowest for this week, to later recover up to 1.1224, now trading little changed daily basis at around 1.1210. Softer-than-expected Chinese data dented the market's mood at the beginning of the day, although risk aversion peaked during European trading hours, with government bond yields falling to multi-week lows on rumors China may start selling US Treasuries. European data had little effect on the shared currency, as the preliminary Q1 GDP came in at 0.4% for Germany and 0.4% also for the whole EU, both matching the market's forecasts. The pair recovered just modestly after disappointing US data, as April Retail Sales were down monthly basis by 0.2%. The core reading, Retail Sales Control Group, resulted unchanged vs. a 0.4% advance expected. Also, Industrial Production fell by 0.5% MoM in April, while Capacity Utilization in the same month was of 77.9%. However, the dollar retained its gains, giving up only after the US Government was planning to delay tariffs on car imports for six months, pushing equities higher in detriment of safe-haven assets.

Despite the positive tone of worldwide indexes, the shared currency seems quite vulnerable ahead of Thursday's opening, with the macroeconomic calendar having some minor figures scheduled. The Union will publish March Trade Balance, with the surplus seen shrinking to €17.1B and the US releasing April Building Permits and Housing starts, seen bouncing, weekly unemployment figures, and the Philly Manufacturing survey.  

The short-term picture for the pair indicates that further declines are still likely, as, in the 4 hours chart, technical indicators have modestly recovered from their lows but remain within negative levels without actual strength. The intraday spike was contained by sellers aligned at around the 20 and 200 SMA, both converging at around the mentioned low, while the price is barely holding above a bearish 100 SMA. Furthermore, the pair tested levels below 1.1190, the 38.2% retracement of its latest daily slide, unable to move beyond the 50% retracement of the same decline.

Support levels: 1.1190 1.1150 1.1110                                                                                   

Resistance levels: 1.1245 1.1280 1.1320

View Live Chart for the EUR/USD

Author

Valeria Bednarik

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.

More from Valeria Bednarik
Share:

Editor's Picks

EUR/USD weakens to near 1.1900 as traders eye US data

EUR/USD eases to near 1.1900 in Tuesday's European trading hours, snapping the two-day winning streak. Markets turn cautious, lifting the haven demand for the US Dollar ahead of the release of key US economic data, including Retail Sales and ADP Employment Change 4-week average.

GBP/USD stays in the red below 1.3700 on renewed USD demand

GBP/USD trades on a weaker note below 1.3700 in the European session on Tuesday. The pair faces challenges due to renewed US Dollar demand, UK political risks and rising expectations of a March Bank of England rate cut. The immediate focus is now on the US Retail Sales data. 

Gold sticks to modest losses above $5,000 ahead of US data

Gold sticks to modest intraday losses through the first half of the European session, though it holds comfortably above the $5,000 psychological mark and the daily swing low. The outcome of Japan's snap election on Sunday removes political uncertainty, which along with signs of easing tensions in the Middle East, remains supportive of the upbeat market mood. This turns out to be a key factor exerting downward pressure on the safe-haven precious metal.

Bitcoin Cash trades lower, risks dead-cat bounce amid bearish signals

Bitcoin Cash trades in the red below $522 at the time of writing on Tuesday, after multiple rejections at key resistance. BCH’s derivatives and on-chain indicators point to growing bearish sentiment and raise the risk of a dead-cat bounce toward lower support levels.

Dollar drops and stocks rally: The week of reckoning for US economic data

Following a sizeable move lower in US technology Stocks last week, we have witnessed a meaningful recovery unfold. The USD Index is in a concerning position; the monthly price continues to hold the south channel support.

Bitcoin Cash trades lower, risks dead-cat bounce amid bearish signals

Bitcoin Cash (BCH) trades in the red below $522 at the time of writing on Tuesday, after multiple rejections at key resistance. BCH’s derivatives and on-chain indicators point to growing bearish sentiment and raise the risk of a dead-cat bounce toward lower support levels.