It was a bad week for the greenback, as there was not a single sign that the US has reverted the slowdown suffered late 2015. In fact, it seemed that things not only were worse during the first quarter of the year, but that the situation persisted through April.
View the Live chart of the EUR/USD
US data released on Thursday showed that growth in the country was for the most tepid during the first three months to March, with the advanced GDP printing 0.5%, below the 0.7% expected and the previous 1.4%. The EU on the contrary, grew by 0.6% against expectations of 0.4% and previous 0.3% according to official data published on Friday.
Ever since the week started, US data disappointed, with housing figures missing expectations, Durable Goods Orders plummeting, weekly unemployment claims rising and consumer confidence easing. The only good news was an uptick in personal income, but given that expenditures shrunk, the positive reading is mostly negative, as it indicates consumption is retreating.
Adding to the picture, the US Federal Reserve had an economic policy meeting, and offer little, if none, to work with, as while leaving doors open for a rate hike and expressing less concerns over the external risks to the economy, it also failed to suggest a certain date for a hike. Speculation that June will be another worthless meeting has took its toll over the greenback afterwards.
The EUR/USD pair surged steadily during these last five days, and is just below the major static resistance level at 1.1460. The daily chart shows that the pair bounced from the 38.2% retracement of the latest bullish run between March and April around 1.1220, the low posted at the beginning of the week, while the technical indicators head sharply higher above their mid-lines, all of which supports some additional gains for the upcoming week.
Still, the 1.1460 level has been a tough bone to break for over a year now, and a breakout is still not confirmed. In fact, the price can go slightly above the level to "clean" shorts and reduce the pressure, to later advance. A clearer confirmation will come then, with some steady advance around the 1.1500 level, which will open doors for a test of 1.1713, August 2015 monthly high.
For the upcoming days, the pair has an immediate support at 1.1360, but it will take a break below 1.1310, to confirm additional declines, back to the 1.1220 price zone. Buying interest is expected to surge around this last, as dollar has little room for long term gains, and market will keep taking advances in the currency as opportunities to sell.
Latest updates on the EUR/USD Forecast
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 eases to near 1.0700 ahead of German inflation data
EUR/USD is paring gains to near 1.0700 in the European session on Monday. The pair stays supported by a softer US Dollar, courtesy of the USD/JPY sell-off and a risk-friendly market environment. Germany's inflation data is next in focus.
USD/JPY recovers after testing 154.50 on likely Japanese intervention
USD/JPY is recovering ground after sliding to 154.50 on what seemed like a Japanese FX intervention. The Yen tumbled in early trades amid news that Japan's PM lost 3 key seats in the by-election. Focus shifts to the US employment data and the Fed decision later this week.
Gold price holds steady above $2,335, bulls seem reluctant amid reduced Fed rate cut bets
Gold price (XAU/USD) attracts some buyers near the $2,320 area and turns positive for the third successive day on Monday, albeit the intraday uptick lacks bullish conviction.
Ripple CTO shares take on ETHgate controversy, XRP holders await SEC opposition brief filing
Ripple loses all gains from the past seven days, trading at $0.50 early on Monday. XRP holders have their eyes peeled for the Securities and Exchange Commission filing of opposition brief to Ripple’s motion to strike expert testimony.
Week ahead: FOMC and jobs data in sight
May kicks off with the Federal Open Market Committee meeting and will be one to watch, scheduled to make the airwaves on Wednesday. It’s pretty much a sealed deal for a no-change decision at this week’s meeting.