- 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.
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
-636863393997651429.png)
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.
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.