- EUR/USD recovery from the lowest since 2017 continued on Friday.
- Weaker US Dollar is seen as the main drive in the correction.
The EUR/USD pair posted on Friday the second consecutive daily gain. It climbed back above 1.1200, reaching the highest level in a week, on the back of another negative session for the US Dollar but risk sentiment improved. “Major global equity indices advanced today, reflecting investor appetite for risk assets, but not enough to salvage a tumultuous week battered by intensifying trade tensions, lackluster activity data and increased uncertainty on Brexit trajectory following UK PM May’s decision to quit.”
Again, lower US yields and weaker-than-expected US data (Durable Goods Orders) weigh on the US Dollar that lost ground across the board. The greenback ended the week under pressure after making a sharp reversal on Thursday and Friday’s losses.
“In effect, the fall in US rates has blunted the dollar advantage, but it has not taken over the relationship between the currencies. The macro-economic effects of the European economic slowdown and the potential damage from yet unsettled British departure continue to weigh heavily on the euro despite the shrinking rate advantage for the dollar”, said Joseph Trevisani, Senior Analyst at FXStreet.
EUR/USD technical outlook
According to Valeria Bednarik, Chief Analyst at FXStreet, the latest advance seems corrective, but warns the EUR/USD pair is technically bearish in the long-term perspective, still developing far below the daily descendant trend line coming from September high, currently at 1.1296. “In the weekly chart, the pair keeps developing below a bearish 20 SMA, which maintains its bearish slope below the larger ones. Technical indicators in the mentioned chart hold within negative levels, the RSI directionless at 43 and the Momentum aiming just modestly higher below the 100 level”.
The immediate resistance is 1.1265, where the pair topped twice this May, followed by the 1.1300 figure notes Bednarik. “Above this last, the bullish case will be a bit more sustainable. If the ongoing correction fails to continue, the risk will turn back south, with a break below 1.1100 exposing the 1.1020/40 price zone.”
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.