EUR/USD Current Price: 1.1029
- EU Consumer Confidence down to -11.6 in March, German inflation retreated.
- The dollar corrects after plummeting last week, fear still rules.
- EUR/USD at risk of accelerating its decline on a break below 1.0990.
The EUR/USD pair is trading at daily lows, nearing the 1.1100 figure, as the dollar is in recovery mode after collapsing at the end of the previous week. News over the weekend were no good, as the coronavirus pandemic keeps growing exponentially, particularly in the US and Europe. Social isolation to curve contagion has one-third of the world in lockdown, hence, economic activity is frozen. Furthermore, several major economies included the US and the UK have taken measures too late to contain the outbreak, and are now paying the price. Still, the largest death toll remains within Europe, as Italy and Spain have largely surpassed the number of cases reported by China.
In this scenario, the market started the week in risk-off mode, with Asian shares falling and European indexes following their lead. These last, however, have managed to bounce from lows, although they continue to trade in the red. Wall Street is set to open modestly up. Meanwhile, US Treasury yields hover around Friday’s closing levels, depressed near record lows.
In the data front, March EU Consumer Confidence came in as expected at -11.6 from -6.6 previously. Germany released the preliminary estimate of March inflation, which resulted at 1.3% YoY, harmonized with that of the EU. Later today, the US will release February Pending Home Sales and the March Dallas Fed Manufacturing Business Index, foreseen at 6.2 from 1.2 previously.
EUR/USD short-term technical outlook
The EUR/USD pair has fallen below the 50% retracement of its March slump, after flirting with the 61.8% retracement of the mentioned decline last week. The 4-hour chart shows that the pair has fallen below its 100 SMA, but also that the 20 SMA keeps advancing now converging with the 200 SMA at around 1.0990. Technical indicators are easing from overbought levels, and while holding above their midlines, they head firmly lower, skewing the risk to the downside.
Support levels: 1.0990 1.0950 1.0920
Resistance levels: 1.1060 1.1100 1.1145
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 hold comfortably above 1.0750 as USD recovery loses steam
EUR/USD clings to small daily gains above 1.0750 in the early American session on Monday. In the absence of high-tier data releases, the US Dollar finds it difficult to gather recovery momentum and helps the pair hold its ground.
GBP/USD struggles to find direction, holds near 1.2550
GBP/USD stays under modest bearish pressure and trades near 1.2550 on Tuesday. The neutral risk mood, as reflected by the mixed action seen in US stocks, doesn't allow the pair to make a decisive move in either direction. The Bank of England will announce policy decisions on Thursday.
Gold rebounds to $2,320 as US yields edge lower
After falling to $2,310 in the early European session, Gold recovered to the $2,310 area in the second half of the day. The benchmark 10-year US Treasury bond yield stays in negative territory below 4.5% and helps XAU/USD find support.
Ripple lawsuit develops with SEC reply under seal, XRP holders await public redacted versions
Ripple lawsuit’s latest development is SEC filing, under seal. The regulator has filed its reply brief and supporting exhibits and the documents will be made public on Wednesday, May 8.
The impact of economic indicators and global dynamics on the US Dollar
Recent labor market data suggest a cooling economy. The disappointing job creation and rising unemployment hint at a slackening demand for labor, which, coupled with subdued wage growth, could signal a slower economic trajectory.