The euro is almost unchanged in the Wednesday session. In North American trade, EUR/USD is trading at 1.1940, down 0.01% on the day.
An important gauge of economic activity is the PMI reports, and the news was positive out of Germany and the eurozone. German PMIs improved in May, as services and manufacturing continue to show strong expansion. Manufacturing PMI rose from 64.0 to 64.9, and the Services PMI climbed from 52.8 to 58.1. Eurozone PMIs posted similar numbers, signalling that the eurozone recovery continues to deepen, as the vaccine rollout moves ahead at a brisk clip.
Later today, we’ll get a look at US Manufacturing and Services PMI, with estimates of 61.5 and 70.0, respectively. A reading above the 50-level points to expansion, so if the consensus is accurate, this would indicate significant growth in both sectors.
Powell sings inflation tune
Fed Chair Jerome Powell played a familiar tune before a congressional committee, saying that inflation remained transitory. However, Powell was forced to defend his stance before some skeptical lawmakers. Headline inflation rose 5% y/y in May, the highest in some 13 years, and Powell was pressed as to whether the economy was headed to the hperinflation of the 1970s and 1980s, when inflation was above 10%. Powell acknowledged that inflationary pressures where stronger than he had anticipated, but declared that hyperinflation was “very, very unlikely”.
Powell attributed most of the recent jump in inflation to the economic reopening and said he expected inflation to wane over time. Investors will be keeping a close eye on the Core PCE Price Index, the Fed’s preferred inflation indicator, which will be released on Friday.
EUR/USD technical
-
1.2055 switched to a resistance role last week, when EUR/USD fell sharply. Above, there is resistance at 1.2251.
-
There is support at 1.1756, followed by support at 1.1653.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities.
Opinions are the authors — not necessarily OANDA’s, its officers or directors. OANDA’s Terms of Use and Privacy Policy apply. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Recommended Content
Editors’ Picks
EUR/USD stays below 1.0800 after upbeat US data
EUR/USD stays under bearish pressure and trades slightly below 1.0800 in the American session on Thursday. The data from the US showed that the real GDP growth for the fourth quarter got revised higher to 3.4% from 3.2%, supporting the USD and weighing on the pair.
GBP/USD stays in daily range above 1.2600
GBP/USD fluctuates in a narrow channel above 1.2600 on Thursday. The better-than-expected Initial Jobless Claims data from the US and the upward revision to the Q4 GDP growth helps the USD stay resilient against its rivals and limits the pair's upside.
Gold clings to strong daily gains above $2,200
Gold retreats from daily highs but holds comfortably above $2,200 in the American session on Friday. The benchmark 10-year US Treasury bond yield stays above 4.2% after upbeat US data and makes it difficult for XAU/USD to preserve its bullish momentum.
XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC
XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase.
Portfolio rebalancing and reflation trades emerge into Q2
Yesterday’s price action pointed at a possible end-of-quarter portfolio rebalancing as the session saw the laggards of the quarter like Apple and Tesla gain, and the stars like Microsoft and Nvidia retreat.