EUR/USD Forecast: Optimism fades as US CPI looms

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.0912

Better than anticipated Eurozone macroeconomic data underpin the Euro.
The United States calendar has nothing relevant to offer ahead of inflation data on Wednesday.
EUR/USD regains its upward potential but still needs to overcome the 1.0930 price zone.

The EUR/USD pair changed course early on Tuesday and trades a handful of pips above the 1.0900 threshold. European indexes returned from the long weekend with optimism and rallied at the opening, weighing on US Dollar demand. The Euro found additional support on better-than-expected Eurozone figures. April Sentix Investor Confidence improved from -11.1 in March to -8.7. Additionally, Retail Sales were down 0.8% MoM in March, as anticipated, while the yearly comparison was slightly better than expected.

European equities markets lost momentum and trimmed part of their gains, which helped the Greenback recover some ground ahead of the US opening. Wall Street, in the meantime, aims to open in the red, while government bond yields hover around Monday closing levels.

The United States macroeconomic calendar does not include relevant macroeconomic data, but several Fed speakers will be on the wires. The focus remains on the US Consumer Price Index (CPI) scheduled for Wednesday.

EUR/USD short-term technical outlook

The EUR/USD pair has room to extend its recovery, according to the daily chart, with no signs of additional slides ahead. The pair continues to develop above bullish moving averages, with the 20 Simple Moving Average (SMA) resuming its advance above the longer ones. Meanwhile, the Momentum indicator has decelerated its decline, although it still heads lower just above its 100 level. The Relative Strength Index (RSI) indicator, on the other hand, has picked up an upward pace at around 58, in line with another leg north.

In the near term, and according to the 4-hour chart, EUR/USD is neutral-to-bullish. The pair bounced from around a bullish 100 SMA and currently develops above a directionless 20 SMA, the latter around 1.0890. Finally, technical indicators lack directional strength, stable around their midlines. Bulls will have better chances of a bullish breakout of 1.0930, a solid static resistance level.

Support levels: 1.0890 1.0835 1.0790

Resistance levels: 1.0930 1.0985 1.1020

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.

AUD/USD holds above 0.6900 ahead of Fed's Warsh

AUD/USD struggles to capitalize on the previous day's modest bounce from its lowest level since early July and trades above 0.6900 in the Asian session on Friday. Thursday's disappointing Australian jobs data tempered RBA rate-hike bets, capping the Aussie. The US Dollar (USD), meanwhile, is regaining positive traction as this week's hot US CPI and PPI reports keep Fed rate hike bets firmly on the table. This further limits the pair ahead of Fed Chair Kevin Warsh speech.

USD/JPY retakes 158.00, with eyes on Warsh's speech

USD/JPY retakes 158.00 in the Asian session on Friday, holding on the overnight bounce from the vicinity of 157.50, or a one-week low, amid the emergence of some US Dollar buying. This week's hot US CPI and PPI reports lifted Fed rate-hike bets, which, along with stable US bond yields and geopolitical uncertainties, help revive USD demand. Traders, however, remain on high alert amid speculation that authorities will step in to prop up the Japanese Yen, which could cap the currency pair ahead of Fed Chair Kevin Warsh's speech.

Gold eases to $4,150 as traders await Warsh's speech

Gold drifts lower to near $4,150 in the Asian session on Friday, reversing part of the previous day's move up amid reviving US Dollar demand. US inflation data released this week reaffirmed bets for at least one Fed rate hike this year, while US bond yields stabilize after Thursday's steep decline. This, along with geopolitical risks, underpins the safe-haven USD, which, in turn, is seen weighing on bullion ahead of Fed Chair Kevin Warsh's speech.

Bitcoin holds $80,500; Ethereum rebounds, Ripple weakens

Bitcoin (BTC), Ethereum (ETH) and Ripple (XRP) show mixed price action on Friday, with BTC and ETH holding above key support levels while XRP struggles below key resistance. Meanwhile, sticky inflation figures have dampened risk appetite, and momentum indicators for these top three cryptocurrencies have also weakened, signaling a risk of a deeper correction if key support fails to hold.

US midterms put fiscal policy under the spotlight, treasury sell-off raises risk

The US will hold its midterm elections - a de facto referendum on the Trump administration - on 3rd November after two years shaped by rising trade protectionism, attacks on Federal Reserve independence and, since the spring, the Iran war. Republicans are expected to take a heavy electoral hit.

Everyone's dumping Gold after hot US inflation. Here's why $4,100 could be a floor, not a cliff

Gold (XAU/USD) is recovering from a sharp sell-off triggered by hotter-than-expected United States (US) inflation data released on Wednesday. The precious metal briefly plunged toward $4,073 as investors increased their bets on further Federal Reserve (Fed) interest rate hikes before recovering as US Treasury yields and the US Dollar (USD) reversed their initial gains.