- EUR/USD heads through 50-hr SMA on dollar weakness.
- EUR/USD breaks descending resistance line.
EUR/USD is turning up the gas as we progress through the NY session with the DXY capped by the 55-D MA at 90.91 ahead of the 18 Jan high of 91.04. Currently, EUR/USD is trading at 1.2211, up 0.09% on the day, (boosted by a less hawkish outcome from Powell's testimony than Tuesday's) having posted a daily high at 1.2223 and low at 1.2154.
After a better bid session on the back of The Institute for Supply Management saying its manufacturing index rose to 60.8% in February, up from 59.1% in January, to reach the highest level since May 2004 as well as PCE prices, the Fed’s preferred measure of inflation that increased to 0.3% over the month, (unchanged at 1.5% on year-to-year basis), and also US initial claims plummetting to a 48-year low of 210k, the US Dollar has now come off its 6-week highs of 90.90 in the DXY.
Powell not committing to 4 rate hikes, not seeing signs of significant wage inflation
The weakness comes in at the time of writing during the second part of Powell’s testimony that has now concluded where markets were looking for a potential less hawkish Powell this time around.
Commenting on wages, Powell said he sees "no signs of significant wage inflation," in a statement adding that 4 rate hikes this year comes under the definition of "gradual". Despite saying greater confidence that the US will grow above trend he will not commit to the 4 hikes and instead says a faster pace of Fed tightening remains to be seen and that it is hard to tighten aggressively with inflation below target; Dollar comes off its highs.
EUR/USD levels
- EUR/USD heads through 50-hr SMA on dollar weakness.
- EUR/USD breaks descending resistance lone.
The price remains below the daily 10 and 21 SMAs and daily double top while consolidating below the 50-D SMA here and the overall picture is a consolidation of the broad-based bullish trend. The recent correction in EUR/USD heads through 50-hr SMA on dollar weakness and the descending resistance line, pointing to a neutral outlook for the meantime. A break back below the January 18 low at 1.2165 and today's low of 1.2154 opens risk towards the 2017-2018 uptrend at 1.2044. To the upside, 1.2330 needs to be broken with positive closes above it for a run to 1.2380 through the 21-D SMA, (1.2339).
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 retreats below 1.0700 after US GDP data
EUR/USD came under modest bearish pressure and retreated below 1.0700. Although the US data showed that the economy grew at a softer pace than expected in Q1, strong inflation-related details provided a boost to the USD.
GBP/USD declines below 1.2500 as USD rebounds
GBP/USD declined below 1.2500 and erased the majority of its daily gains with the immediate reaction to the US GDP report. The US economy expanded at a softer pace than expected in Q1 but the price deflator jumped to 3.4% from 1.8%.
Gold drops below $2,320 as US yields shoot higher
Gold lost its traction and turned negative on the day below $2,320 in the American session on Thursday. The benchmark 10-year US Treasury bond yield is up more than 1% on the day above 4.7% after US GDP report, weighing on XAU/USD.
XRP extends its decline, crypto experts comment on Ripple stablecoin and benefits for XRP Ledger
Ripple extends decline to $0.52 on Thursday, wipes out weekly gains. Crypto expert asks Ripple CTO how the stablecoin will benefit the XRP Ledger and native token XRP.
After the US close, it’s the Tokyo CPI
After the US close, it’s the Tokyo CPI, a reliable indicator of the national number and then the BoJ policy announcement. Tokyo CPI ex food and energy in Japan was a rise to 2.90% in March from 2.50%.