EUR/USD Current Price: 1.0472

  • Investors changed course and abandoned high-yielding assets amid global overheating inflation.
  • Wall Street plummeted, anticipating several 50 bps rate hikes in the US.
  • EUR/USD shed roughly 100 pips, now poised to break below 1.0400.

The EUR/USD pair edged lower on Wednesday, ending the day near a daily low of 1.0475. The pair pulled back from a weekly high of 1.0563 as the market’s mood took a turn for the worse mid-European session following the release of inflation figures. The EU Consumer Price Index growth was confirmed at 7.4% YoY in April, slightly below the preliminary estimate of 7.5%, although the core inflation was upwardly revised to 3.5% from 3%.

But it was not just the EU. The UK reported that the CPI increased by 9% in the year to April, while later it was the turn of Canada, which reported its annual inflation hit 6.8%. Overheating price pressures are a drag on economic growth, already undermined by supply-chain issues and the Eastern European crisis.

Stocks took it negatively, with European indexes closing in the red and Wall Street nose-diving. The Dow Jones Industrial Average shed over 1,000 points intraday amid resurgent demand for safety. The greenback made the most out of it, strengthening against most major rivals.

As for the US, the country published April Building Permits, down 3.2% MoM, and Housing Starts for the same month, which declined by 0.2%, both missing the market’s expectations and further exacerbating the dismal mood.

On Thursday, the European Central Bank will release the minutes of its latest meeting, while the EU will publish the March Current Account and Construction Output for the same month. The US will release April's Existing Home Sales.

EUR/USD short-term technical outlook

The EUR/USD pair seems to have completed its bullish correction and is on its way to resuming its decline. The daily chart shows that the pair retreated after testing a  firmly bearish 20 SMA, while technical indicators have lost their bullish strength. The Momentum is currently consolidating around its midline, while the RSI has already resumed its decline, now at 39.

The 4-hour chart shows that the pair fell after repeatedly failing to overcome a bearish 100 SMA and is now around a mildly-bullish 20 SMA. Technical indicators have retreated from overbought levels, with the Momentum flat at around 100 and the RSI heading south at around 48, hinting at a bearish continuation in the upcoming sessions.

Support levels: 1.0470 1.0430 1.0390

Resistance levels: 1.0520 1.0575 1.0620  

View Live Chart for the EUR/USD

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.

Feed news Join Telegram

Recommended Content


Recommended Content

Editors’ Picks

AUD/USD bounces modestly after flirting with 0.6900

AUD/USD bounces modestly after flirting with 0.6900

AUD/USD trades around 0.6925 after nearing 0.6900 earlier in the day. The greenback is the daily winner as investors reconsider FOMC Minutes. Federal Reserve officials provided hawkish and optimistic messages, spooking the recession’s ghost.

AUD/USD News

EURUSD on the back foot below 1.0100

EURUSD on the back foot below 1.0100

The EUR/USD pair trades just below the 1.0100 threshold amid the prevalent dollar’s strength. EU confirmed annual inflation at 8.9% YoY in July, while US data was mostly encouraging, except for that related to the housing sector.

EUR/USD News

Gold bearish breakout underway

Gold bearish breakout underway

Gold is losing ground for a fourth consecutive day, trading at fresh weekly lows. The metal suffers from renewed dollar strength, as US data suggest the economy remains resilient to the latest global woes, leaving room for the Fed to maintain its aggressive stance.

Gold News

Top 3 Cryptos Price Prediction: Bitcoin, Ethereum, and Ripple

Top 3 Cryptos Price Prediction: Bitcoin, Ethereum, and Ripple

The crypto market is edging near catastrophe, but the catalyst makers have yet to be triggered. Either sell-off comes soon, or smart money will continue liquidating early bears.

Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!

BECOME PREMIUM

Majors

Cryptocurrencies

Signatures