- EUR/USD bulls take a breather after rising to one-month high during a two-day uptrend.
- Hawkish ECB speak, mixed US data and repeated Fed comments underpin the run-up.
- Risk-aversion failed to propel the US dollar amid doubts over growth, inflation.
- US Durable Goods Orders for April, German data and risk catalysts are extra burden on the market watchers.
EUR/USD dribbles around a one-month high, after rising for the last two consecutive days to Wednesday’s Asian morning, as the US dollar selling pauses ahead of the key catalyst, as well as amid a risk-off mood. That said, the major currency pair seesaws around 1.0730-35 by the press time.
Fears of slowing housing growth and hawkish comments from the European Central Bank (ECB) officials could be termed as the key factors that recently propelled the EUR/USD prices. On the same line were the repetitive Fedspeak and an absence of impressive data from elsewhere. It’s worth noting that the risk-aversion couldn’t lift the US dollar on downbeat Treasury yields ahead of today’s Minutes of the latest Federal Open Market Committee (FOMC).
US New Home Sales for April marked the biggest monthly fall in nine years with 16.6% MoM figures and sparked concerns over the growth of the world’s largest economy, especially at the time when inflation fears are mounting. The same weighed down the US Treasury yields and the US Dollar Index (DXY) as Fed policymakers keep repeating the 50 bps rate hike concerns. It’s worth noting that the US preliminary activity numbers for May also came in softer and exerted additional downside pressure on the greenback.
That said, the US 10-year Treasury yields dropped the most in a week to refresh a one-month low around 2.717% while the DXY extended the week-start fall towards late April bottom near 101.70. Elsewhere, the Wall Street benchmarks closed mixed, after an initially downbeat performance.
Not only the USD weakness but the economic optimism among the European policymakers and upbeat data from Germany also weighed on the EUR/USD prices. On Tuesday, the European Central Bank (ECB) President Christine Lagarde joined Vice President of the European Commission Valdis Dombrovskis to portray the economic resilience of the bloc. Further, German PMI was firmer for May while the Eurozone numbers were softer-than-expected. It should be noted that some of the ECB policymakers have recently spread direct comments on the 50 bps rate hike in July and offered notable strength to the Euro.
That said, the EUR/USD traders may pay attention to the qualitative catalysts ahead of the European morning and hence a risk-off mood may consolidate some of the pair’s latest gains. However, German GfK sentiment figures, GDP data and a speech from ECB President Lagarde will be crucial to watch afterward. Following that, the US Durable Goods Orders for April and FOMC minutes will be important. Should the US data keep coming softer, the EUR/USD pair will justify the technical breakout to please buyers.
A daily closing beyond the previous support line from early March, around 1.0710, directs EUR/USD prices towards the 50-SMA hurdle surrounding 1.0765 ahead of challenging a downward sloping resistance line from February, near 1.0845.
Additional important levels
|Today last price||1.0735|
|Today Daily Change||0.0045|
|Today Daily Change %||0.42%|
|Today daily open||1.069|
|Previous Daily High||1.0698|
|Previous Daily Low||1.0552|
|Previous Weekly High||1.0607|
|Previous Weekly Low||1.0389|
|Previous Monthly High||1.1076|
|Previous Monthly Low||1.0471|
|Daily Fibonacci 38.2%||1.0642|
|Daily Fibonacci 61.8%||1.0608|
|Daily Pivot Point S1||1.0596|
|Daily Pivot Point S2||1.0502|
|Daily Pivot Point S3||1.0451|
|Daily Pivot Point R1||1.0741|
|Daily Pivot Point R2||1.0792|
|Daily Pivot Point R3||1.0886|
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.