- US dollar strengthens amid risk aversion, DXY up 0.30%.
- EUR/USD trims a fraction of its recent gains.
- EUR/CHF plummets more than a hundred pips in minutes.
The EUR/USD is back under 1.0500 as the US dollar strengthened amid a deterioration in market sentiment. At the same time, a sharp slide in EUR/CHF also weighed on the euro.
Wall Street and EUR/CHF on free fall
Leading stock indices in Wall Street are falling by more than 2% and have erased the gains of the previous two trading days. Pessimism about the global economic outlook is back on the table and also affected by more hawkish rhetoric from Federal Reserve and European Central Bank officials.
As risk-off set in, the demand for Treasuries emerged. As a consequence, the US 10-year yield fell to 2.90% and the 30-year to 3.11%. The decline in yields so far prevents a larger appreciation of the US dollar.
The context boosted the Swiss franc and the yen that are the best performers on Wednesday. The EUR/CHF lost more than a hundred pips during the last two hours, falling from 1.0480 to 1.0364 and hitting the euro. Today, Swiss National Bank Chairman Thomas Jordan repeated that they are "ready to intervene in currency markets when necessary."
Is the recovery over?
At the time of writing, EUR/USD trades at 1.0489, the daily low. Price is testing the 55- and 200-hour Simple Moving Averages (SMA). A consolidation below this level should point to a potential end of the rally from the multi-year low. The following support stands at 1.0435, followed by 1.0390.
On the upside, the critical short-term area to watch is 1.0525/30, a horizontal resistance and the 20-hour SMA. Above, the euro should look at 1.0555 and the daily high at 1.0563.
Technical levels
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 clings to gains near 1.0700, awaits key US data
EUR/USD clings to gains near the 1.0700 level in early Europe on Thursday. Renewed US Dollar weakness offsets the risk-off market environment, supporting the pair ahead of the key US GDP and PCE inflation data.
USD/JPY keeps pushing higher, eyes 156.00 ahead of US GDP data
USD/JPY keeps breaking into its highest chart territory since June of 1990 early Thursday, recapturing 155.50 for the first time in 34 years as the Japanese Yen remains vulnerable, despite looming intervention risks. The focus shifts to Thursday's US GDP report and the BoJ decision on Friday.
Gold closes below key $2,318 support, US GDP holds the key
Gold price is breathing a sigh of relief early Thursday after testing offers near $2,315 once again. Broad risk-aversion seems to be helping Gold find a floor, as traders refrain from placing any fresh directional bets on the bright metal ahead of the preliminary reading of the US first-quarter GDP due later on Thursday.
Injective price weakness persists despite over 5.9 million INJ tokens burned
Injective price is trading with a bearish bias, stuck in the lower section of the market range. The bearish outlook abounds despite the network's deflationary efforts to pump the price.
Meta takes a guidance slide amidst the battle between yields and earnings
Meta's disappointing outlook cast doubt on whether the market's enthusiasm for artificial intelligence. Investors now brace for significant macroeconomic challenges ahead, particularly with the release of first-quarter GDP data.