EUR/USD Forecast: Waiting for chief Powell

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.2070

The German GFK Consumer Confidence survey unexpectedly contracted to -8.8 in May.
The US Federal Reserve is expected to maintain its policy unchanged, focus on QE.
EUR/USD consolidates monthly gains lacking bullish potential in the near-term.

The EUR/USD pair trades at around 1.2070, pretty much unchanged on a daily basis ahead of the US Federal Reserve’s monetary policy announcement. Investors are mildly optimistic ahead of the event, scheduled for Wednesday’s afternoon.

US Treasury yields are up, as well as stocks, with the greenback mostly up across the board, although major pairs remain within familiar levels. Germany published the May GFK Consumer Confidence Survey, which printed at -8.8 worse than the previous -6.1 and missing the expected -3.5. The US released the preliminary estimate of the March Goods Trade Balance, which printed a deficit of $-90.59 billion. As for the Fed, investors are expecting the central bank to maintain rates on hold, with the focus on whatever chief Jerome Powell says on the future of quantitative easing.

EUR/USD short-term technical outlook

The near-term picture for the EUR/USD pair suggests a possible slide ahead without confirming it. The 4-hour chart shows that it has broken below its 20 SMA, which heads marginally higher a few pips above the current level. Technical indicators, in the meantime, head south, the Momentum within negative levels but the RSI holding around 51. The upcoming direction will depend on how the market reads Powell, but in general, the dollar has limited bullish scope.

Support levels: 1.2050 1.2010 1.1985

Resistance levels: 1.2115 1.2160 1.2200

View Live Chart for the EUR/USD

Premium

You have reached your limit of 3 free articles for this month.

Start your subscription and get access to all our original articles.

Subscribe to Premium Sign In

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.

EUR/USD: US Dollar to remain pressured until uncertainty fog dissipates

Unimpressive European Central Bank left monetary policy unchanged for the fifth consecutive meeting. The United States first-tier employment and inflation data is scheduled for the second week of February. EUR/USD battles to remain afloat above 1.1800, sellers moving to the sidelines.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold: Volatility persists in commodity space

After losing more than 8% to end the previous week, Gold remained under heavy selling pressure on Monday and dropped toward $4,400. Although XAU/USD staged a decisive rebound afterward, it failed to stabilize above $5,000. The US economic calendar will feature Nonfarm Payrolls and Consumer Price Index data for January, which could influence the market pricing of the Federal Reserve’s policy outlook and impact Gold’s performance.

Week ahead: US NFP and CPI data to shake Fed cut bets, Japan election looms

US NFP and CPI data awaited after Warsh’s nomination as Fed chief. Yen traders lock gaze on Sunday’s snap election. UK and Eurozone Q4 GDP data also on the agenda. China CPI and PPI could reveal more weakness in domestic demand.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.