EUR/USD Current price: 1.0938
- Financial markets keep rotating around central banks and monetary policies.
- The Eurozone reported a sharp decline in Industrial Production in January.
- EUR/USD is poised to resume its advance but still needs to clear a critical Fibonacci level.
The EUR/USD pair keeps trading within familiar levels on Wednesday, hovering around 1.0940 ahead of the American session opening. Financial markets moved past the latest United States (US) Consumer Price Index (CPI). Inflation in the US remained above the Federal Reserve (Fed)’s 2% goal in February, as reported by the Bureau of Labor Statistics (BLS), and eased at a slower-than-anticipated pace. Nevertheless, the figures had no relevant impact across the FX board, and they barely moved bets on when the Fed would cut interest rates.
Wall Street closed Tuesday with solid gains after flirting with record highs, also helped by a recovering tech sector. Stocks momentum faded in Asia amid woes in China, as Country Garden Holdings, a property development company, missed a coupon payment on a yuan bond. Additionally, hopes that the Bank of Japan (BoJ) will soon end its negative-rate cycle undermining local markets.
European players seem a bit more optimistic, as most local indexes trade in the green, supporting EUR/USD. Still, Euro gains remained limited due to comments from European Central Bank (ECB) policymaker Francois Villeroy de Galhau, who said interest rate cuts are more likely in June.
Data-wise, the Eurozone published January Industrial Production, which fell 3.2% MoM and 6.7% YoY, much worse than anticipated. The upcoming US session has nothing to offer regarding data, with the focus shifting to Retail Sales figures to be out on Thursday.
EUR/USD short-term technical outlook
From a technical point of view, the risk skews to the upside. The daily chart shows the pair bounced from an intraday low of 1.0920, just above the 50% Fibonacci retracement of the 1.1139/1.0734 daily slide at 1.0917. The same chart shows that technical indicators are picking up within positive levels, reflecting that buyers hold the grip. Finally, the 20 Simple Moving Average (SMA) is crossing above the longer ones, although all of them remain confined to a tight 20 pips range.
In the near term, and according to the 4-hour chart, buyers also retain control. Technical indicators advance, although the Momentum indicator remains within neutral levels. At the same time, the pair hovers around a flat 20 SMA, still unable to gain bullish traction beyond it. The longer moving averages, in the meantime, remain well below the current level, also supporting another run higher. The main resistance level is the 61.8% retracement of the aforementioned slump at 1.0970.
Support levels: 1.0915 1.0865 1.0820
Resistance levels: 1.0970 1.1010 1.1045
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 holds above 1.0750 to start the week
EUR/USD trades in positive territory above 1.0750 in the European session on Monday. The US Dollar struggles to find demand following Friday's disappointing labor market data and helps the pair hold its ground.
GBP/USD edges higher toward 1.2600
Following Friday's volatile action, GBP/USD pushes higher toward 1.2600 on Monday. Soft April jobs report from the US and the modest improvement seen in risk mood make it difficult for the US Dollar to gather strength.
Gold rebounds above $2,310 after downbeat NFP data, eyes on Fedspeak
Gold price trades in positive territory above $2,310 after closing the previous week in the red. The weaker-than-expected US employment data have boosted the odds of a September Fed rate cut, hurting the USD and helping XAU/USD find support.
Addressing the crypto investor dilemma: To invest or not? Premium
Bitcoin price trades around $63,000 with no directional bias. The consolidation has pushed crypto investors into a state of uncertainty. Investors can expect a bullish directional bias above $70,000 and a bearish one below $50,000.
Week ahead: BoE and RBA decisions headline a calm week
Bank of England meets on Thursday, unlikely to signal rate cuts. Reserve Bank of Australia could maintain a higher-for-longer stance. Elsewhere, Bank of Japan releases summary of opinions.