EUR/USD Forecast: After failing to rise on good news, is it ready to fall?

EUR/USD is off the highs despite dovish FOMC minutes and upbeat EZ PMIs.
A busy US calendar awaits traders, and trade is also of interest.
The technical picture is balanced for the pair.

Yohay Elam FXStreet

EUR/USD is trading around 1.1330 once again after it topped 1.1370 late on Wednesday. It fails to gain despite two positive developments.

The FOMC Meeting Minutes confirmed the dovish twist by the world's most powerful central bank. The Fed is set to keep rates on hold for quite a while given external uncertainties. Moreover, the Federal Reserve is keen on ending the balance sheet reduction program relatively soon. The news sent stocks up and the US Dollar down, but not for long.

The Flash euro-zone purchasing managers' indices came out mostly above expectations, showing tentative signs of a rebound. Markit's forward-looking survey for the German manufacturing sector showed a worsening picture once again, but France saw improvements in both sectors and Germany enjoyed a bump up in the services sector.

When a currency pair cannot rise on good news, it exposes its weakness.

Taking stock on talks

Trade talks continue in Washington. According to reports, the US and China are working on six memorandums of understanding on various topics. Chinese Premier Liu He may meet President Donald Trump on Friday. A meeting between Trump and his counterpart Xi Jinping is currently not on the cards.

And while the US is getting closer to China on trade, there is no progress with the EU. Austrian Chancellor Sebastian Kurz left a meeting with Trump at the White House saying that "relations have seen better days." The US is considering slapping new tariffs on EU car imports later this year.

Brexit negotiations also continue with the EU and the UK going in circles around the Irish Backstop issue. There are 36 days left until the UK leaves the EU and a hard Brexit is becoming more real every day.

A busy calendar

Later today, the US publishes durable goods orders for December. The belated report feeds into the all-important GDP figure next week. Increases are expected.

See: US Durable Goods Preview: Shutdown reporting vs. the trend

Also, the Philly Fed Index, weekly jobless claims, Markit's flash PMIs, and existing home sales will all be of interest.

See: Existing Home Sales Preview: Revived by falling rates?

EUR/USD Technical analysis

EUR/USD still trades above the 50 Simple Moving Average on the four-hour chart, but Momentum is waning, and the Relative Strength Index is turning down. It is a bit of a mixed picture.

Support awaits at 1.1320 which was a low point earlier. 1.1295 provided some support early in the week, and 1.1275 is already more significant: it is the weekly low. Further down, 1.1250 is a double bottom, and the 2019 low of 1.1235 is next down the line.

1.1335 capped the pair on Monday and is followed by 1.1372, the peak seen on Wednesday. 1.1390 and 1.1405 supported EUR/USD back in January and serve as resistance lines now.

Author

Yohay Elam

FXStreet

Yohay is in Forex since 2008 when he founded Forex Crunch, a blog crafted in his free time that turned into a fully-fledged currency website later sold to Finixio.

AUD/USD rises to 0.6950 as USD slips on Fed's Warsh

AUD/USD regains traction and extends the bounce toward 0.6950 in the Asian session on Friday. Fed Chair Warsh's comments reinforce the selling pressure on the US Dollar, allowing the pair to stretch higher. Warsh said that he remains committed to delivering price stability without giving away anything on future interest rate path.

USD/JPY falls in symc with USD, gives up 158.00 after Warsh's speech

USD/JPY has come under fresh selling pressure and gives up 158.00 in the Asian session on Friday amid the emergence of fresh US Dollar selling. Fed Chair Warsh's non-committal commentary on the future tightening path, weighs on the US Dollar and the pair.

Gold looks vacillating above $4,150

Gold alternates gains with losses below the key $4,200 mark per troy ounce on Friday. The yellow metal’s irresolute price action comes in response to a modest pullback in the US Dollar and a tepid recovery in US Treasury yields across the board.

Bitcoin steadies at $82,000: The five forces crushing the Uptober rally

Crypto markets have remained under pressure so far in October, with Bitcoin (BTC) sliding below $80,000 earlier this week before recovering to around $82,000 on Friday, as macroeconomic headwinds and cooling demand weigh on the market.

The Fed just got a second hot inflation number. Here's what the diesel signal is really saying

The Federal Reserve (Fed) faces a renewed inflation challenge after two consecutive reports showed price pressure intensifying across the US economy. September's Consumer Price Index (CPI) confirmed accelerating consumer inflation, while the Producer Price Index (PPI) revealed an even sharper rise in business costs. Behind both reports lies a common factor: energy prices.

Everyone's dumping Gold after hot US inflation. Here's why $4,100 could be a floor, not a cliff

Gold (XAU/USD) is recovering from a sharp sell-off triggered by hotter-than-expected United States (US) inflation data released on Wednesday. The precious metal briefly plunged toward $4,073 as investors increased their bets on further Federal Reserve (Fed) interest rate hikes before recovering as US Treasury yields and the US Dollar (USD) reversed their initial gains.