EUR/USD Forecast: Euro needs to reclaim 1.0950/60 to turn bullish

EUR/USD has staged a rebound after having dropped to a multi-week low on Thursday.
The US Dollar could have a hard time gathering strength in case risk flows return.
The pair is likely to face stiff resistance in 1.0950/60 area.

Eren Sengezer FXStreet

EUR/USD has staged a technical correction early Friday after having touched its weakest level in a month at 1.0900 on Thursday. The modest improvement in market mood in the European morning helps the pair limit its losses and risk perception could continue to drive the action ahead of the weekend.

Resurfacing fears over a deepening banking crisis in the United States caused investors to stay away from risk-sensitive assets on Thursday. Consequently, the US Dollar (USD) outperformed its rivals despite the disappointing weekly Initial Jobless Claims and lower-than-expected April Producer Price Index (PPI) data.

Early Friday, US stock index futures trade in positive territory and the Euro Stoxx 50 is up nearly 0.5%. A risk rally in Wall Street could put additional weight on the USD ahead of the weekend and allow EUR/USD to extend its rebound.

Meanwhile, market participants will keep a close eye on comments from European Central Bank (ECB) officials. After ECB policymaker Joachim Nagel pushed back against market chatter that the ECB was likely to hike its key rates two more times in July and September, the Euro struggled to find demand.

The US economic docket will feature the University of Michigan's Consumer Sentiment Index for May on Friday. In case the report shows that banking woes had a significant negative impact on consumer confidence, safe-haven flows could return to markets and force EUR/USD to stay on the back foot heading into the weekend.

EUR/USD Technical Analysis

EUR/USD stays dangerously close to 1.0900 (static level, psychological level, Thursday low). The Relative Strength Index (RSI) indicator on the four-hour chart, however, aligns near 30, suggesting that the pair could stage a correction before the next leg lower.

A four-hour close below 1.0900 should bring in additional sellers and open the door for an extended slide toward 1.0870 (Fibonacci 38.2% retracement of the latest uptrend) and 1.0800 (psychological level, Fibonacci 50% retracement).

On the upside, stiff resistance seems to have formed at 1.0950/1.0960, where the Fibonacci 23.6% retracement level and the 200-period Simple Moving Average (SMA) align. Sellers could move to sidelines if EUR/USD rises below that level and starts using it as support. In that scenario, 1.1000 (100-period SMA, 50-period SMA, psychological level) and 1.1050 (static level) could be seen as next bullish targets.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

AUD/USD holds steady near 0.7200 amid escalating US-Iran tensions

AUD/USD consolidates just below its highest level since mid-May, touched on Friday, and hovers around 0.7200 at the start of a new week amid mixed cues. Hawkish RBA expectations continue to act as a tailwind for the Aussie. Meanwhile, the upbeat US NFP report lifted Fed rate hike bets, which, along with escalating US-Iran tensions, underpins the safe-haven US Dollar and caps the currency pair.

USD/JPY stays weak below 156.00 on aggressive hawkish BoJ repricing

USD/JPY stays in the red below 156.00 in the European session on Monday as aggressively hawkish BoJ repricing continues to drive the Japanese Yen higher. Meanwhile, the US Dollar faces headwinds from US debt worries and uncertainty about the Fed's policy outlook ahead of Friday's US CPI data release.

Gold sticks to losses as bears await acceptance below $4,400 amid Fed rate hike bets

Gold attracts some sellers for the second straight day, though it lacks follow-through, and hovers around the $4,400 mark heading into the European session. Moreover, the commodity holds above Friday's swing trough, touched in reaction to the upbeat US monthly employment details, warranting some caution for bearish traders before positioning for any further losses.

Bittensor: TAO eyes $300 amid launch on Raydium, parody meme coin, ChatGPT-6 Astra release

Bittensor is trading in the green on Monday, continuing a steady upward trend over the last five days, with a 25% gain. Social chatter surrounding Bittensor is increasing amid a similarly named meme coin launched on Solana and the release of ChatGPT-6 Astra. The technical outlook for TAO is bullish as momentum strengthens and buyers target the $300 breakout.

Strong US jobs, Middle East tensions and key inflation data ahead

Good morning all, hope you enjoyed your weekend. Markets are starting the week after Friday’s stronger-than-expected US jobs report, which increased expectations that the Fed could raise rates at its September meeting. However, US markets are closed today for the Labor Day holiday, so liquidity should be lower and we may see slower price action.

Diesel’s record $100 warning: The oil shock hiding in plain sight

The Oil market may look calmer than it did a few months ago, but diesel is sending a very different message. The US diesel crack spread, the premium of ultra-low sulphur diesel futures over WTI, recently surged above $100 per barrel for the first time, reaching an intraday record of just over $102.00.