EUR/USD Forecast: Bears retake control amid exacerbated risk factors

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.0525

European countries are discussing a potential full embargo on Russian oil.
Global indexes are on the back foot amid fears about slowing economic growth.
EUR/USD is on the verge of a bearish breakout, with fresh multi-year lows in sight.

The American dollar started the week with a better footing, recovering most of the ground shed on Friday. The EUR/USD pair consolidates a few pips above the 1.0500 figure ahead of the US open after a mixed batch of EU data. German Retail Sales were down 0.1% in March, while the April EU Sentiment Economic Indicator printed at 105, missing the 108 expected and below the previous 106.7. Finally, the final readings of the April S&P Global Manufacturing PMIs were upwardly revised. The German index was confirmed at 54.6, while that for the EU printed at 55.5.

Meanwhile, stocks are down in Europe as the focus remains on tensions surrounding the relationship with Russia. The German Economy Minister Robert Habeck noted that there is still no unity among EU member states on an oil embargo on Russia, although Finance Minister Christian Lindner added that it is still possible. At the same time, European Central Bank vice-president Luis de Guindos said that a rate hike in July is possible, although unlikely. None is positive news for the shared currency, which may accelerate its slump and reach fresh multi-year lows this week.

The US session will bring the April S&P Global Manufacturing PMI alongside the official ISM report for the same month. The latter is foreseen at 57.7, up from 53.8 in the previous month. At the time being, Wall Street trades dip in the red, reflecting the dismal market mood, and it seems unlikely that upbeat US figures may be enough to change the market’s bias.

EUR/USD short-term technical outlook

The EUR/USD pair is down from an intraday high of 1.0567, and the daily chart shows that the risk remains skewed to the downside. The 20 SMA heads firmly lower, far above the current level, while the longer ones maintain their bearish slopes above the shorter one. Technical indicators have recovered modestly but remain within oversold levels without signs that could confirm an interim bottom.

According to the 4-hour chart, the risk is also on the downside. The pair is unable to break above a bearish 20 SMA, which currently stands a few pips above the current level. The Momentum indicator is struggling to reenter positive territory while the RSI indicator consolidates around 37, indicating absent buying interest. Bears are likely to resume acting on a break below the 1.0500 level, with the ultimate bearish target at 1.0339, the January 2017 monthly low.

Support levels: 1.0500 1.0460 1.0415

Resistance levels: 1.0560 1.0605 1.0650

View Live Chart for the EUR/USD

Premium

You have reached your limit of 3 free articles for this month.

Start your subscription and get access to all our original articles.

Subscribe to Premium Sign In

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.

EUR/USD flirts with daily highs, retargets 1.1900

EUR/USD regains upside traction, returning to the 1.1880 zone and refocusing its attention to the key 1.1900 barrier. The pair’s slight gains comes against the backdrop of a humble decline in the US Dollar as investors continue to assess the latest US CPI readings and the potential Fed’s rate path.

GBP/USD remains well bid around 1.3650

GBP/USD maintains its upside momentum in place, hovering around daily highs near 1.3650 and setting aside part of the recent three-day drop. Cable’s improved sentiment comes on the back of the Greenback’s irresolute price action, while recent hawkish comments from the BoE’s Pill also collaborate with the uptick.

Gold clings to gains just above $5,000/oz

Gold is reclaiming part of the ground lost on Wednesday’s marked decline, as bargain-hunters keep piling up and lifting prices past the key $5,000 per troy ounce. The precious metal’s move higher is also underpinned by the slight pullback in the US Dollar and declining US Treasury yields across the curve.

Crypto Today: Bitcoin, Ethereum, XRP in choppy price action, weighed down by falling institutional interest

Bitcoin's upside remains largely constrained amid weak technicals and declining institutional interest. Ethereum trades sideways above $1,900 support with the upside capped below $2,000 amid ETF outflows.

Week ahead – Data blitz, Fed Minutes and RBNZ decision in the spotlight

US GDP and PCE inflation are main highlights, plus the Fed minutes. UK and Japan have busy calendars too with focus on CPI. Flash PMIs for February will also be doing the rounds. RBNZ meets, is unlikely to follow RBA’s hawkish path.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.