Will the EUR/USD surge extend higher?

James Chen, CMT Investopedia

Early on Tuesday, the euro surged sharply at the expense of other major currencies, most notably the struggling US dollar. This sizeable euro surge was driven largely by continued positive economic data from the Eurozone, which has helped to keep the shared currency aloft despite a European Central Bank that has shown reluctance in tightening monetary policy. The most salient news boosting the euro on Tuesday morning was a better-than-expected German Q3 GDP reading of +0.8% against a prior consensus forecast of +0.6%. Additionally, Italy’s Q3 GDP was also strong at +0.5%, matching its best reading in around seven years.

Against the US dollar, Tuesday’s euro rise was pronounced, establishing a new two-and-a-half week high slightly above 1.1800, without substantially paring those gains throughout most of the day. The US dollar was heavily pressured on Tuesday by both this sharp euro surge as well as continuing concerns over US economic growth and the likelihood and timing of US tax reform. The dollar will be tested further on Wednesday by the release of US CPI inflation data for October as well as key retail sales data.

From a technical perspective, EUR/USD tentatively broke out on Tuesday above both a key descending trend line extending back to the early-September 1.2091 high, as well as the 50-day moving average. After Tuesday’s euro surge, EUR/USD should be driven more by the dollar than the euro for the remainder of the week. Helping to drive the US dollar will be the noted inflation and retail sales data on Wednesday as well as how the US tax reform debate plays out in the next several days.

If the US dollar remains pressured in the short-term after Tuesday’s dollar breakdown, EUR/USD could surge further towards 1.1900-area resistance. With clear monetary policy divergence between the Fed and ECB currently still prevailing, however, there is a strong possibility for an impending turn back to the downside and resumption of the EUR/USD correction from its recent long-term highs. The trigger point for such a resumption remains around the key 1.1600 support area.

Author

James Chen, CMT

Investopedia

James Chen, Chartered Market Technician (CMT), has been a financial market trader and analyst for nearly two decades.

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

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 climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

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.