- EUR/USD has jumped to near 1.0740 as the USD Index has extended correction.
- Tight credit conditions by US regional banks are effectively weighing on US inflationary pressures.
- The ECB is anticipated ECB to raise interest rates further despite the German recession.
The EUR/USD pair has climbed above the critical resistance of 1.0740 in the early European session after a firmer recovery from near the round-level support of 1.0700. The major currency pair is anticipated to extend further as the US Dollar Index (DXY) has extended its correction further to near 104.08.
S&P500 futures are holding losses generated in Asia as the overall market mood is quite cautious due to the US debt-ceiling issues. Despite narrowing the budget's spending proposal to $70 billion from the original offering of $1 trillion, the White House is failing to get approval for raising the $31 trillion US borrowing cap limit from Republican leaders.
Meanwhile, soaring expectations for a pause in the policy-tightening spell by the Federal Reserve (Fed) are weighing heavily on the USD Index. As tight credit conditions by US regional banks are effectively weighing on inflationary pressures, the Fed believes that more rate hikes for June monetary policy meeting are less certain.
On the Eurozone front, the German economy has fallen into recession after reporting a contraction in Q1 real Gross Domestic Product (GDP) by 0.3%. Investors should note that reporting a contraction for two consecutive quarters is considered a recession and the German economy also reported a contraction in Q4 of the prior year by 0.5%. This could force the European Central Bank (ECB) President Christine Lagarde to focus first on the economic outlook and later on inflationary pressures.
On the contrary, ECB policymaker Klaas Knot said that the ECB needs to raise the policy rate at least two more times, as reported by Reuters. He further argued that rates should stay put for a significant period of time following these increases.
|Today last price||1.0737|
|Today Daily Change||0.0012|
|Today Daily Change %||0.11|
|Today daily open||1.0725|
|Previous Daily High||1.0757|
|Previous Daily Low||1.0708|
|Previous Weekly High||1.0904|
|Previous Weekly Low||1.076|
|Previous Monthly High||1.1095|
|Previous Monthly Low||1.0788|
|Daily Fibonacci 38.2%||1.0726|
|Daily Fibonacci 61.8%||1.0738|
|Daily Pivot Point S1||1.0703|
|Daily Pivot Point S2||1.0681|
|Daily Pivot Point S3||1.0654|
|Daily Pivot Point R1||1.0752|
|Daily Pivot Point R2||1.0779|
|Daily Pivot Point R3||1.0801|
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.
Follow us on Telegram
Stay updated of all the news
EUR/USD battles 1.0700 after mixed Eurozone data
EUR/USD has come under renewed selling pressure, battling 1.0700 after mixed Eurozone Retail Sales data for April. The pair remains undermined by the cautious market mood, disappointing German Factory Orders and a broad US Dollar rebound.
GBP/USD turns south toward 1.2400 as US Dollar recovers
GBP/USD is heading south toward 1.2400, meeting fresh supply in the European session. The US Dollar is seeing renewed safe-haven buying amid a risk-off market profile, acting as a headwind to the pair.
Gold oscillates around $1,960 amid mixed responses to Fed’s June policy
Gold price is auctioning inside the woods around $1,960.00 in the early London session. The precious metal is displaying back-and-forth action as the investing community is divided about the interest rate decision by the Fed to be taken in June’s monetary policy meeting.
Is the metaverse hype back in action?
Although there are no major macroeconomic events this week, investors can expect massive volatility on a daily basis. The reasoning behind this outlook is that Apple will be conducting the 2023 Apple Worldwide Developers Conference (WWDC) on June 5.
Markets are likely to focus on ECB commentary
This is a very quiet week in terms of data and hence markets are likely to focus on last minute central bank commentary. The FOMC blackout period kicked off already on Sunday, but today we have a bunch of ECB speakers on the wires.