- EUR/USD is trading at a two-week high as the market mood improves.
- A light calendar may leave the focus on Brexit developments and Fed speculation.
- The technical picture is clearly bullish for the pair.
EUR/USD is trading in the mid-1.1300s, the highest since March 4th. It had already recovered the losses incurred by the dovish ECB twist and is now extending its gains.
Similar to last week, the drivers come from outside the old continent. The UK Parliament decided to reject a no-deal Brexit previous week an extension of Article 50 is imminent. Over the weekend, there are signs that the third Meaningful Vote on May's deal may pass. While the situation is fluid, the upbeat mood supports the pound and also the euro.
Stocks markets are up as China's recent economic figures have not been too bad. Several analysts see the Chinese economy "landing safely" and not crashing. A Trump-Xi Summit may wait for June, according to Chinese media. Nevertheless, as long as the trade "truce" continues and the US does not impose new tariffs, stocks can keep rising.
On Friday, US consumer confidence came out slightly above expectations. In theory, this development should be USD-positive, but as it shows lower risk, it weighs on the safe-haven US Dollar and Japanese yen.
The Fed's rate decision on Wednesday is already eyed. Chair Jerome Powell and his colleagues are set to leave the interest rate unchanged and exercise patience, as they pledged. The focus is on the projections for further rate increases, known as the "dot-plot." A downgrade from two hikes to one hike this year is the base-case scenario, but all options are on the table.
See: Fed Preview: Three scenarios for the crucial dot-plot and three other things to watch
Today's light calendar features the German Bundesbank Monthly Report and the NAHB Housing Market Index, both third-tier events.
Developments around Brexit and the market mood ahead of the Fed will likely have their say.
EUR/USD Technical Analysis
-636884951582982496.png)
EUR/USD kicked off the week by climbing above the 200 Simple Moving Average on the four-hour chart, another bullish sign, joining upside Momentum and a positive Relative Strength Index (RSI). All in all, the quiet climb seems set to continue.
Resistance awaits at 1.1360 that provided support to the pair in late February. The next cap is already much higher: 1.1410 that was a swing high in early March. 1.1420 awaits close by. It is a high point in February. 1.1485 is next.
1.1345 was a high point last week and is still fought over. 1.1324 capped EUR/USD in early March and 1.1305 was a swing low on the way up last week and a swing low in March. 1.1295 provided support last week, and 1.1275 was a stepping stone on the way up.
Support lines are dense and resistance is sparse.
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 holds above 1.0750 to start the week
EUR/USD trades in positive territory above 1.0750 in the European session on Monday. The US Dollar struggles to find demand following Friday's disappointing labor market data and helps the pair hold its ground.
GBP/USD edges higher toward 1.2600
Following Friday's volatile action, GBP/USD pushes higher toward 1.2600 on Monday. Soft April jobs report from the US and the modest improvement seen in risk mood make it difficult for the US Dollar to gather strength.
Gold rebounds above $2,310 after downbeat NFP data, eyes on Fedspeak
Gold price trades in positive territory above $2,310 after closing the previous week in the red. The weaker-than-expected US employment data have boosted the odds of a September Fed rate cut, hurting the USD and helping XAU/USD find support.
Addressing the crypto investor dilemma: To invest or not? Premium
Bitcoin price trades around $63,000 with no directional bias. The consolidation has pushed crypto investors into a state of uncertainty. Investors can expect a bullish directional bias above $70,000 and a bearish one below $50,000.
Week ahead: BoE and RBA decisions headline a calm week
Bank of England meets on Thursday, unlikely to signal rate cuts. Reserve Bank of Australia could maintain a higher-for-longer stance. Elsewhere, Bank of Japan releases summary of opinions.