Having been under pressure for most of the week, the EUR/USD pair managed to close it above the 1.0900 level, trimming half of its losses amid another round of soft US data released on Friday. The pair peaked at 1.1020 at the beginning of the week, following the confirmation that Macron's will become the next French president after the second round of elections, but there was kind of "buy the rumor, sell the fact" afterwards that put the common currency under selling pressure.
The macroeconomic calendar was quite scarce, but none of the less, the greenback advanced, as with easing political woes in Europe, focus shifted back to the US and the Fed. Odds for a Fed hike next June are currently above 80%, after a couple of Fed's speakers hit the wires these days, warning of the risk of overheating the economy if rates remain low. Low volumes have kept majors within their previous weeks' range, while the dollar got a fresh impulse on Thursday, as weekly unemployment claims fell to their lowest in 28 years, and the PPI rose beyond expected. Further weighing on the EUR was stubborn Draghi, who reaffirmed that is no time to think of tapering stimulus.
US inflation released this Friday was worse-than-expected, and while is not a game changer for the Fed, it actually was for the greenback, sending it sharply lower across the board. Somehow, the movement indicates a) that a rate hike is pretty much priced in, and b) that confidence in whatever reform Trump will bring continues fading. Bottom line, despite retaining part of its gains, the future does not look that bright for the USD at this point.
From a technical point of view, the EUR/USD pair has settled a few pips below the 61.8% retracement of the post US-election slump around 1.0930, but in the daily chart, technical indicators have managed to recover from negative territory, now heading higher around their mid-lines, whilst the price is back above a bullish 20 DMA after a brief slide below it. In the weekly chart, the pair was unable to surpass its 100 SMA for a second consecutive week, but remains nearby, far above a bullish 20 SMA and with technical indicators easing within positive territory, indicating that the 1.1000 region remains critical when it comes to trend definitions, as only above it the pair can resume its advance, with the next resistances then at 1.1045, 1.1080 and 1.1160.
There are not so strong supports at 1.0890 and 1.0850, with the most relevant one being 1.0820, the 50% retracement of the mentioned decline and the lowest since the first round of French elections. Below it, the pair will likely fill the weekly opening gap left back then around 1.0730.
Sentiment towards the EUR/USD pair is barely bullish in the short term, as the FXStreet forecast poll shows that 45% bet for an advance, but 44% expect the pair to remain range bound. In a one month view, bears account for 58%, well below previous 71%, somehow reflecting fading faith in the greenback. The 3-month average target is now 1.0773, higher than previous 1.0719.
For the GBP/USD pair, seems a top has been confirmed near 1.3000, as from here on, bears lead the pair. In fact, as time goes by, the number of those betting for further slides increase to reach 75% in the longer view, with the pair seen then near 1.2500, weighed by a neutral BOE and tough pre-Brexit talks.
Bulls lead the way in the USD/JPY pair, although by a small margin. The Japanese yen has been showing a particular behavior during these past few weeks, linked to US Treasury yields, and pretty much ignoring data or dollar's strength/weakness. Despite sentiment leans the scale towards the upside, the pair is hardly seen beyond 115.00.
.
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 steady below 1.0800 after US PCE meets expectations
EUR/USD remains depressed below 1.0800 after soft French inflation data, amid minimal volatility and thin liquidity on Good Friday. The pair barely reacted to US PCE inflation data, with the Greenback shedding some pips. Fed Chair Jerome Powell set to speak ahead of the weekly close.
GBP/USD hovers around 1.2620 in dull trading
GBP/USD trades sideways above 1.2600 amid a widespread holiday restraining action across financial markets. Investors took a long weekend ahead of critical United States employment data next week. Fed Chair Powell coming up next.
Gold price sits at all-time highs above $2,230
Gold price holds near a fresh all-time high at $2,236 in thinned trading amid the Easter Holiday. Most major world markets remain closed, although the United States published core PCE inflation, the Federal Reserve’s favorite inflation gauge.
Jito price could hit $6 as JTO coils up inside this bullish pattern
Jito (JTO) price has been on an uptrend since forming a local bottom in early January. Since then, JTO has revisited the key swing point formed in early December, suggesting the bulls’ intention to move higher.
Key events in developed markets next week
Next week, the main focus will be inflation and the labour market in the Eurozone. We expect services inflation to be impacted by the easter effect, while the unemployment rate to be unchanged.