EUR/USD Current price: 1.0860
- The US Consumer Price Index rose 3.4% YoY in April, as expected.
- The US Dollar accelerated its decline as inflation figures hint at higher-for-longer interest rates.
- EUR/USD gains bullish momentum and aims to test the 1.0900 mark.
The EUR/USD pair spent the first half of the day consolidating Tuesday’s gains, reaching a fresh intraday high of 1.0836 during European trading hours. The US Dollar came under selling pressure after the release of the United States (US) Producer Price Index (PPI) on Tuesday, as wholesale inflation was higher than anticipated on a monthly basis in April. The report gained relevance ahead of the release of the Consumer Price Index (CPI) for the same month and after data showed inflationary pressures rose in the first quarter of the year.
The pair then broke higher after the US CPI came pretty much in line with the market expectations. The CPI rose 3.4% YoY in April from 3.5% in March, while the core annual reading printed at 3.6%, easing from the previous 3.8%. On a monthly basis, the CPI was up 0.3%, according to the US Bureau of Labor Statistics (BLS), slightly below the expected 0.4%. The figures were short of worrisome but indicated the Federal Reserve (Fed) could extend its wait-and-see stance on monetary policy.
Other US data released alognside resulted discouraging, as Retail Sales stayed pat in April, while the New York Empire State Manufacturing Index fell to -15.6 in May, worse than the -10 anticipated. A couple of Fed speakers will be on the wires after Wall Street’s opening.
Meanwhile, US indexes jumped north with the news, while government bond yields turned lower, putting additional pressure on the USD.
EUR/USD short-term technical outlook
The daily chart for the EUR/USD pair shows it trades near a fresh multi-week high of 1.0868 and is poised to extend its advance. The pair is up for a third consecutive day and developing above all its moving averages. The 20 Simple Moving Average (SMA) gains upward traction below the longer ones, while the 100 SMA provides near-term support around 1.0830. Technical indicators, in the meantime, aim firmly north within positive levels, reflecting increased buying interest.
Bullish strength is more evident in the near term. The 4-hour chart shows the pair running higher above bullish moving averages, with the 20 SMA accelerating north above the longer ones. At the same time, technical indicators head firmly north. The Relative Strength Index (RSI) indicator is currently in overbought territory but without signs of upward exhaustion, leaving the door open for additional gains.
Support levels: 1.0830 1.0795 1.0750
Resistance levels: 1.0870 1.0910 1.0945
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 stays in positive territory above 1.0850 after US data
EUR/USD clings to modest daily gains above 1.0850 in the second half of the day on Friday. The improving risk mood makes it difficult for the US Dollar to hold its ground after PCE inflation data, helping the pair edge higher ahead of the weekend.
GBP/USD stabilizes above 1.2850 as risk mood improves
GBP/USD maintains recovery momentum and fluctuates above 1.2850 in the American session on Friday. The positive shift seen in risk mood doesn't allow the US Dollar to preserve its strength and supports the pair.
Gold rebounds above $2,380 as US yields stretch lower
Following a quiet European session, Gold gathers bullish momentum and trades decisively higher on the day above $2,380. The benchmark 10-year US Treasury bond yield loses more than 1% on the day after US PCE inflation data, fuelling XAU/USD's upside.
Avalanche price sets for a rally following retest of key support level
Avalanche (AVAX) price bounced off the $26.34 support level to trade at $27.95 as of Friday. Growing on-chain development activity indicates a potential bullish move in the coming days.
The election, Trump's Dollar policy, and the future of the Yen
After an assassination attempt on former President Donald Trump and drop out of President Biden, Kamala Harris has been endorsed as the Democratic candidate to compete against Trump in the upcoming November US presidential election.