EUR/USD Current Price: 1.0652
- US Durable Goods Orders increased by a modest 0.4% in April, missing expectations.
- Investors await FOMC meeting Minutes and hints about future monetary policy.
- EUR/USD shed over 100 pips from its weekly tops, but bears are not done yet.
The American dollar strengthens on Wednesday as investors could no longer look beyond signs of slowing economic growth and lingering inflation. The EUR/USD pair eased from a weekly high of 1.0748 and trades in the 1.0650 price zone, not far from its daily low.
Additionally, market players are concerned about mounting tensions between the US and China after US President Joe Biden said that his country would militarily defend Taiwan in the event of a Chinese invasion.
The European Central Bank published the Financial Stability Review, which took its toll on the shared currency, as policymakers noted that "an abrupt increase in real interest rates could induce house price corrections” while adding that "further corrections in financial markets could be triggered by escalation of war, even weaker global growth or if the monetary policy needs to adjust faster than expected."
The dismal market mood was exacerbated by the release of US Durable Goods Orders, up by a modest 0.4% in April, below the 0.6% expected. Also, the March reading was downwardly revised from 0.8% to 0.6%. Later in the American session, the Federal Reserve will release the Minutes of its latest meeting. The document is expected to somehow confirm at least two more 50 bps hikes and to include further details on the balance sheet reduction.
EUR/USD short-term technical outlook
The EUR/USD pair has retreated below the 38.2% retracement of its latest daily slide, measured between 1.1184 and 1.0348, at 1.0670. The pair neared the 50% retracement on Tuesday before giving up, suggesting the bullish correction may be complete. Further declines below 1.0545, the 23.6% retracement of the aforementioned decline should confirm so.
Technical readings in the daily chart, however, reflect the ongoing decline but fall short of confirming more slides. The 20 SMA is directionless at around 1.0540, reinforcing the Fibonacci support level, while technical indicators remain within positive levels, the Momentum stable, and the RSI heading lower.
According to the 4-hour chart, the pair is nearing a bearish setup. The pair is pressuring the 20 and 200 SMAs, after the shorter one crossed above, the longer one. Technical indicators, in the meantime, have turned sharply lower from overbought readings, still holding above their midlines with bearish slopes.
Support levels: 1.0640 1.0590 1.0545
Resistance levels: 1.0670 1.0720 1.0770
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.