EUR/USD: Bears back in control, 2016 lows on sight?

Dhwani Mehta FXStreet

The EUR/USD pair extends its consolidative mode near multi-year lows, now pushing the rate back below 1.04 handle amid resurgent USD demand across the board, as risk-on returns to markets.

EUR/USD breaches 1.0400 again, what next?

Currently, EUR/USD inches -0.05% lower to trade near daily lows of 1.0390, having failed to sustain the recovery above 1.04 handle. The main currency pair attempted a brief recovery in the early Asian hours, but lost steam over the last hours as a renewed risk-on wave gripped markets after the BOJ upgraded its economic assessment in wake of stronger exports.

Amid a better risk sentiment, the euro tends to lose its shine as a funding currency, while the US dollar (risk currency) gets a boost against its main competitors.

From a wider perspective, divergent monetary policy outlooks between the Fed and ECB also continue to keep the bearish pressure intact on the major, with the bears now targeting 14-year lows struck last week at 1.0366 levels.

Next of relevance for the major remains the German PPI and Eurozone current account data, while the US economic docket remains data-dry today.

EUR/USD Technical Levels

In terms of technicals, the pair finds the immediate resistance 1.0418/22 (daily high/ 5-DMA). A break beyond the last, doors will open for a test of 1.0458 (daily R1) and from there to 1.0500 (round figure). On the flip side, the immediate support is placed at 1.0366 (yearly/ 14-yr lows) below which 1.0335 (daily S2) and 1.0300 (key support) could be tested.

Sell 94%

Buy 6%

Avg Sell Price 1.0653

Avg Buy Price 1.0540

Liquidity Distribution

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

GBP/USD bounces off lows, back above 1.3200

After bottoming out near 1.3160, GBP/USD manages to regain a bit of shine and reclaim the 1.3200 mark and beyond at the end of the week. Stronger-than-expected UK Retail Sales data seem to be helping the British Pound limit its losses, while the chaotic UK political environment keeps the bulls at bay for now.

EUR/USD looks consolidative around 1.1460

EUR/USD stages a modest rebound after slipping to a three-month low below 1.1420 at the end of the week. That said, the pair now looks to consolidate humble gains just above 1.1460 despite growing uncertainty surrounding the next round of US-Iran negotiations, which keeps the US Dollar’s downside contained.

Gold slips back to six-day lows, targets $4,100

Gold retreats for the third consecutive day on Friday, eroding gains seen in the first half of the week and approaching the key $4,100 mark per troy ounce. Indeed, the precious metal continues to face headwinds from the Fed's hawkish stance and renewed uncertainty surrounding the next round of US-Iran negotiations.

Solana extends correction despite ETF inflows, RWA adoption

Solana (SOL) price edges below $70 extending its losses for the fourth straight day this week. The institutional demand for Solana is building, with steady inflows so far this week and Morgan Stanley’s amended S-1 filing for a Solana-focused Exchange-Traded Fund.

The Iran war didn't break the US economy, but what happens next?

Nearly four months after the start of the Iran war, the US economy remains remarkably resilient. While the conflict initially triggered a severe disruption to global energy markets and a sharp rise in Oil prices, recent diplomatic progress between Washington and Tehran has eased concerns about a prolonged supply shock.

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.