- EUR/USD is trading above 1.1300, consolidating its gains.
- A mix of Brexit optimism and market calm helps it rise.
- The technical picture is positive for the pair that now faces a crucial test.
EUR/USD is consolidating its gains above 1.1300. The pair has now erased all the price it lost after the ECB made its dovish shift precisely one week ago.
Brexit is behind some of the moves. The British Parliament voted to avoid a no-deal Brexit in a stricter version than the government wanted. Wednesday's late vote included chaotic scenes, but the lower prospects of an immediate exit and hopes for a lengthy extension coming from the EU sent the pound high.
The substantial move in the pound had a secondary effect on the common currency as well.
Elsewhere, markets remain calm. US durable goods orders came out better than expected on the core numbers, and markets ignored the headline figures. Chinese industrial output and retail sales were not impressive, but met early forecasts and added to the sense of calm.
Concerns about the German economy prevail, but they are not new. The German economy ministry said that 2019 saw a slow start due to external factors, but that the continent's powerhouse continued enjoying growth. The respected IFO Think-Tank slashed its 2019 GDP growth forecast to 0.6% from 1.1% beforehand, but see a rebound with 1.8% in 2020.
The economic calendar is lighter today: US jobless claims, import prices, and new home sales are all of interest, but Brexit developments will likely have the upper hand.
EUR/USD Technical Analysis
-636881525486664206.png)
EUR/USD enjoys upside Momentum, and it broke above the 50 Simple Moving Average on the four-hour chart earlier this week. The Relative Strength Index is shy of 70, thus not pointing to overbought conditions.
The only missing component is a break above the 200 SMA which comes out at 1.1342 at the time of writing and is nearing the high point seen yesterday. Breaking above this confluence is critical for the next move up, but the pair may also be rejected at this cap.
The next resistance line is 1.1360 which provided support in February. It is followed by 1.1410 and 1.1420 that were high points in late February/early March.
Looking down, 1.1310 was the low point earlier and also supported the pair in early March. 1.1285 is where the 50 SMA meets the chart and a support line from last week. 1.1275 was a stepping stone on the way up and also a swing low from mid-February. 1.1245, 1.1235, and 1.1220 are next.
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
AUD/USD risks a deeper drop in the short term
AUD/USD rapidly left behind Wednesday’s decent advance and resumed its downward trend on the back of the intense buying pressure in the greenback, while mixed results from the domestic labour market report failed to lend support to AUD.
EUR/USD leaves the door open to a decline to 1.0600
A decent comeback in the Greenback lured sellers back into the market, motivating EUR/USD to give away the earlier advance to weekly tops around 1.0690 and shift its attention to a potential revisit of the 1.0600 neighbourhood instead.
Gold is closely monitoring geopolitics
Gold trades in positive territory above $2,380 on Thursday. Although the benchmark 10-year US Treasury bond yield holds steady following upbeat US data, XAU/USD continues to stretch higher on growing fears over a deepening conflict in the Middle East.
Bitcoin price shows strength as IMF attests to spread and intensity of BTC transactions ahead of halving
Bitcoin (BTC) price is borderline strong and weak with the brunt of the weakness being felt by altcoins. Regarding strength, it continues to close above the $60,000 threshold for seven weeks in a row.
Is the Biden administration trying to destroy the Dollar?
Confidence in Western financial markets has already been shaken enough by the 20% devaluation of the dollar over the last few years. But now the European Commission wants to hand Ukraine $300 billion seized from Russia.