- EUR/USD pares the biggest daily loss in a week amid cautious markets.
- Comparatively upbeat US PMIs jostle with the hawkish ECB talks and pre-event anxiety to prod Euro traders.
- US policymakers’ inability to strike debt ceiling deal weighs on sentiment, EUR/USD price.
- Fed Minutes, headlines about US default will be the key to watch for immediate directions.
EUR/USD bears take a breather around 1.0770 during early Wednesday in Asia, after posting the biggest daily loss in a week. That said, escalating fears of the US default, hawkish Fed bets and anxiety ahead of the Fed Minutes seem to contribute the maximum in the latest sour sentiment, as well as to the EUR/USD weakness. Additionally weighing on the Euro price is the US-China tension and the West versus Russian jitters.
No progress in the talks to avoid the US debt ceiling expiration and fears that the US may mark the ‘catastrophic’ default weighed on the market sentiment of late. Recently, US House Speaker Kevin McCarthy crossed wires, via Reuters, while suggesting no deal on the debt ceiling extension today but repeating previous optimism that they will get an agreement before June 01. Previously, Washington rolled out news stating the US Treasury has asked multiple agencies if they can delay the payment demands.
On Tuesday, preliminary figures of the May monthly PMIs signaled that the US Services sector keeps outgrowing the manufacturing ones and fuelled the Composite PMI figure to the highest levels in a year. That said, the US S&P Global Manufacturing PMI eased to 48.5 from 50.2 versus 50.0 market forecasts whereas Sevices PMI rose to 55.1 compared to 52.6 expected and 53.6. With this, the Composite PMI marked 54.5 figures versus the analysts’ expectations of 50.0 and 53.4.
On the other hand, the first readings of Eurozone HCOB monthly PMIs for May came in a little interesting despite an upbeat 55.9 number for the Services activity gauge.
Apart from the data, the latest comments from Atlanta Fed President Raphael Bostic, Richmond Fed President Thomas Barkin and San Francisco President Mary C Daly who backed the calls for higher Fed rates while citing the inflation woes, which in turn propelled the betts on the Fed rate increase in June. The same push back the Fed rate cut and allows the US Dollar to remain firmer despite a retreat in the US Treasury bond yields.
At home, European Central Bank (ECB) Vice President Luis de Guindos and policymaker Joachim Nagel ruled out policy pivot talks while citing the higher inflation to defend the rate hike bias.
Against this backdrop, Wall Street closed in the red and helped the US Dollar despite downbeat yields.
Looking ahead, the Eurozone calendar remains empty and may add strength to the latest EUR/USD inaction. However, risk catalysts and the latest Federal Open Market Committee (FOMC) Meeting Minutes will be crucial to watch for clear directions.
EUR/USD remains bearish between a three-week-old descending resistance line and an upward-sloping trend line support stretched from late November 2022, respectively between 1.0805 and 1.0745.
Additional important levels
|Today last price||1.0773|
|Today Daily Change||-0.0040|
|Today Daily Change %||-0.37%|
|Today daily open||1.0813|
|Previous Daily High||1.0831|
|Previous Daily Low||1.0796|
|Previous Weekly High||1.0904|
|Previous Weekly Low||1.076|
|Previous Monthly High||1.1095|
|Previous Monthly Low||1.0788|
|Daily Fibonacci 38.2%||1.0818|
|Daily Fibonacci 61.8%||1.0809|
|Daily Pivot Point S1||1.0795|
|Daily Pivot Point S2||1.0777|
|Daily Pivot Point S3||1.0759|
|Daily Pivot Point R1||1.0831|
|Daily Pivot Point R2||1.0849|
|Daily Pivot Point R3||1.0867|
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.