- EUR/USD quickly gathers traction and surpasses 1.0100.
- The greenback accelerates losses amidst prevailing risk-on mood.
- EU Energy Ministers will meet later in the session.
The single currency regains the smile and fresh buying interest and lifts EUR/USD to new 3-week highs past the 1.0100 level at the end of the week.
EUR/USD bolstered by risk appetite
EUR/USD seems to have broken above the recent consolidative phase and advances north of the 1.0100 hurdle on the back of the solid improvement in the risk-linked galaxy on Friday.
Extra upside in the pair also derives fresh oxygen from the intense selling pressure in the greenback, which currently forces the US Dollar Index (DXY) to confront multi-session lows in the 108.40 zone, all following new cycle highs near 110.80 recorded just a couple of sessions ago.
As market participants continue to digest Thursday’s unprecedented interest rate hike by the ECB, Friday’s focus of attention is expected to shift to the EU Energy Ministers emergency meeting amidst the ongoing energy cruch in the region.
Across the pond, the only release will be Wholesale Inventories for the month of July along with speeches by Fed’s Evans, George and Waller.
What to look for around EUR
EUR/USD fully reverses the recent weakness and advances on quite a convincing fashion well north of the parity level to print new multi-week tops following the renewed offered stance in the buck.
So far, price action around the European currency is expected to closely follow dollar dynamics, geopolitical concerns, fragmentation worries and the Fed-ECB divergence.
On the negatives for the single currency emerge the so far increasing speculation of a potential recession in the region, which looks propped up by dwindling sentiment gauges as well as an incipient slowdown in some fundamentals.
Key events in the euro area this week: Eurogroup Meeting, Emergency Energy Meeting (Friday).
Eminent issues on the back boiler: Continuation of the ECB hiking cycle. Italian elections in late September. Fragmentation risks amidst the ECB’s normalization of its monetary conditions. Impact of the war in Ukraine and the persistent energy crunch on the region’s growth prospects and inflation outlook.
EUR/USD levels to watch
So far, the pair is advancing 1.09% at 1.0103 and now faces the initial barrier at 1.0153 (55-day SMA) followed by 1.0202 (August 17 high) and then 1.0344 (100-day SMA). On the flip side, the breakdown of 0.9863 (2022 low September 6) would target 0.9859 (December 2002 low) en route to 0.9685 (October 2002 low).
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 holds above 1.0700 ahead of key US data
EUR/USD trades in a tight range above 1.0700 in the early European session on Friday. The US Dollar struggles to gather strength ahead of key PCE Price Index data, the Fed's preferred gauge of inflation, and helps the pair hold its ground.
USD/JPY stays above 156.00 after BoJ Governor Ueda's comments
USD/JPY holds above 156.00 after surging above this level with the initial reaction to the Bank of Japan's decision to leave the policy settings unchanged. BoJ Governor said weak Yen was not impacting prices but added that they will watch FX developments closely.
Gold price oscillates in a range as the focus remains glued to the US PCE Price Index
Gold price struggles to attract any meaningful buyers amid the emergence of fresh USD buying. Bets that the Fed will keep rates higher for longer amid sticky inflation help revive the USD demand.
Sei Price Prediction: SEI is in the zone of interest after a 10% leap
Sei price has been in recovery mode for almost ten days now, following a fall of almost 65% beginning in mid-March. While the SEI bulls continue to show strength, the uptrend could prove premature as massive bearish sentiment hovers above the altcoin’s price.
US core PCE inflation set to signal firm price pressures as markets delay Federal Reserve rate cut bets
The core PCE Price Index, which excludes volatile food and energy prices, is seen as the more influential measure of inflation in terms of Fed positioning. The index is forecast to rise 0.3% on a monthly basis in March, matching February’s increase.