- EUR/USD clocked two-week high of 1.2429 in Asia.
- One-month risk reversals have regained topside bias.
- Focus on EZ GDP release and trade war fears.
EUR/USD rose to 1.2429 in Asia - the highest level since Feb. 19 after Gary Cohn, advocate for free trade in the White House, announced his resignation boosting fears of a trade war.
Also, the EUR/USD one-month 25 delta risk reversals have turned positive, meaning the implied volatility premium for EUR calls (bullish bets) is more than the implied volatility premium for EUR puts (bearish bets). As of writing, the risk reversals are being paid at 0.07 EUR calls vs. 0.275 EUR puts on Mar. 2. It indicates the options market has regained EUR bullish bias.
Eurozone Q4 GDP is due at 10:00 GMT
The data is expected to confirm the economy expanded 0.6 percent quarter-on-quarter and 2.7 percent year-on-year in the fourth quarter as shown by the preliminary estimate released in February. That said, an upward revision of the GDP could yield another leg higher in the EUR.
Focus on trade war talk
It is feared that Gary Cohn's resignation will embolden anti-free trade forces in the US. So, the EUR (backed by EZ current account surplus) will likely remain bid against the USD. Also, the greenback would take a beating if new Chief Economic Advisor is a "trade hawk" (someone who believes in protectionist policies).
EUR/USD Technical Levels
As of writing, the pair is trading at 1.2418. A move above 1.2461 (76.4 percent Fibonacci retracement of Feb. 16 high - Mar. 1 low) would expose 1.25 (psychological hurdle) and 1.2556 (Feb. 16 high). On the downside, breach of support at 1.2403 (Asian session low) could yield a re-test of 1.2311 (10-day moving average). A close below the said level would allow a sustained drop to 1.2259 (50-day moving average).
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
AUD/USD gains momentum above 0.6500 ahead of Australian Retail Sales data
AUD/USD trades in positive territory for six consecutive days around 0.6535 during the early Asian session on Monday. The upward momentum of the pair is bolstered by the hawkish stance from the Reserve Bank of Australia after the recent release of Consumer Price Index inflation data last week.
EUR/USD holds positive ground above 1.0700, eyes on German CPI data
EUR/USD trades on a stronger note around 1.0710 during the early Asian trading hours on Monday. The weaker US Dollar below the 106.00 mark provides some support to the major pair.
Gold trades on a softer note below $2,350 on hotter-than-expected US inflation data
Gold price trades on a softer note near $2,335 on Monday during the early Asian session. The recent US economic data showed that US inflationary pressures staying firm, which has added further to market doubts about near-term US Federal Reserve rate cuts.
Ethereum fees drops to lowest level since October, ETH sustains above $3,200
Ethereum’s high transaction fees has been a sticky issue for the blockchain in the past. This led to Layer 2 chains and scaling solutions developing alternatives for users looking to transact at a lower cost.
Week ahead: Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.