EUR/USD Forecast: Dismal EU data takes its toll on the shared currency

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.0785

EU’s economic activity contracted much more than anticipated in April.
US Initial Jobless Claims for the week ended April 17 at 4427K, worse than expected.
EUR/USD bearish and heading toward the 1.0700 price zone.

The EUR/USD pair fell to a fresh 3-week low of 1.0755 this Thursday, undermined by worse than expected macroeconomic figures. Markit released the preliminary estimates of April PMIs which posted record contractions, amid the coronavirus-related lockdown. The German manufacturing index fell to 34.3 while services output contracted to 15.9. For the whole Union, the manufacturing PMI resulted at 33.6, while the services index plunged to 11.7, all record lows. Also, the German GFK Consumer Confidence Survey for May plummeted to -23.4 against the previous 2.7.

Meanwhile, the ECB announced that it would accept some junk-rated debt as collateral to mitigate the impact of possible rating downgrades on collateral availability. The central bank added that it “may decide further measures if needed.”

The pair remains under pressure after the US released Initial Jobless Claims for the week ended April 17, which resulted at 4427K worse than the expected 4200K but better than the previous 5237K. Later today, Markit will release the preliminary estimates of the US April PMIs. The manufacturing index is foreseen at 38 from 48.5, while the services one is expected at 31.5 from 39.8.

EUR/USD short-term technical outlook

The EUR/USD pair is trading at around 1.0780 ahead of the US opening, unaffected by the latest American data. The pair is technically bearish, extending its decline into fresh lows and moving further below a daily descendant trend line coming from 1.1147. In the 4-hour chart, moving averages gain downward traction above the current level, also indicating increased bearish pressure, as technical indicators hold below their midlines, the Momentum flat but the RSI heading south around 34.

Support levels: 1.0750 1.0710 1.0680

Resistance levels: 1.0790 1.0830 1.0865

View Live Chart for the EUR/USD

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 flat lines around 1.1900; looks to US NFP report for fresh directional impetus

The EUR/USD pair is seen oscillating in a narrow trading band around the 1.1900 mark during the Asian session on Wednesday as traders opt to wait for the release of US monthly employment details before placing fresh directional bets.

GBP/USD slips back to daily lows near 1.3640

GBP/USD drops to daily lows near 1.3640 as sellers push harder and the Greenback extends its rebound in the latter part of Tuesday’s session. Looking ahead, the combination of key US releases, including NFP and CPI, alongside important UK data, should keep the pound firmly in focus over the coming days.

Gold recovers to $5,050, focus shifts to US jobs data

Gold turns higher to test $5,050 in the Asian session on Wednesday. Traders assess whether Gold has found a floor following a historic sell-off. The delayed US employment report for January, which was pushed back due to the recently ended four-day government shutdown, will take center stage later on Wednesday.

Ethereum: Whales buy the dip amid rising short bets

Following one of Ethereum's largest weekly drawdowns, whales are slowly returning to action alongside a drop in retail selling pressure. After slightly selling into the decline at the start of the month, whales or wallets with a balance of 10K-100K ETH began buying the dip last Wednesday as prices crashed further.

Dollar drops and stocks rally: The week of reckoning for US economic data

Following a sizeable move lower in US technology Stocks last week, we have witnessed a meaningful recovery unfold. The USD Index is in a concerning position; the monthly price continues to hold the south channel support.

XRP holds $1.40 amid ETF inflows and stable derivatives market

Ripple trades under pressure, with immediate support at $1.40 holding at the time of writing on Tuesday. A recovery attempt from last week’s sell-off to $1.12 stalled at $1.54 on Friday, leading to limited price action between the current support and the resistance.