EUR/USD gasps for breath at 1.17 as the decline continues ahead of German GDP

The Euro looks set to extend declines as the Greenback rebounds on an inflation-happy FOMC.
Europe's economic slump from the first quarter is leaking suspiciously into the second quarter, and German GDP figures are expected to be subdued.

Joshua Gibson FXStreet

The EUR/USD is trading around the 1.1700 level ahead of Thursday's European market session, and the pair is struggling to develop a bounce from Wednesday drop.

The FOMC was pleasingly optimistic for Dollar bulls, and the USD gained ground against its major counterparts including the Euro as the FOMC signaled it is comfortable with allowing inflation to run higher within the US economy, bedding down market concerns of excessive rate hikes throughout 2018, at least temporarily.

Thursday brings a new challenge for the US Dollar, as the Trump administration gears up to deploy hefty tariffs on foreign vehicle imports, delivering a blow to NAFTA renegotiations as the US government employs the already-familiar Section 232 of citing national security concerns as an impetus for trade tariffs.

German GDP figures will also be hitting today at 06:00 GMT, with headline quarter-on-quarter GDP for 2018's Q1 expected at 0.3%, in-line with the previous figure. After that will be Monetary Policy Meeting Accounts from the European Central Bank (ECB) at 11:30 GMT, followed by Continuing Jobless Claims from the US at 12:30, expected to print at 1.754 million, a slight uptick from the previous reading of 1.707 million.

EUR/USD levels to watch

FXStreet's Chief Analyst, Valeria Bednarik, noted that the EUR/USD waffled post-FOMC, and the technical positioning for the Euro for Thursday is leaning to the bearish side: "the EUR/USD pair extended its decline post-FOMC's Minutes, heading into the Asian opening below the 1.1700 figure, and poised to extend its decline according to intraday technical readings, as in the 4 hours chart, the pair is back below its 20 SMA after a false bullish breakout earlier this week. Technical indicators in the mentioned chart have accelerated south below their midlines, with the RSI currently nearing oversold readings. The pair has a strong static mid-term support at 1.1660, and a break below it should lead to a steeper slide regardless oversold conditions."

Support levels: 1.1660 1.1620 1.1590

Resistance levels: 1.1720 1.1750 1.1785

Author

Joshua Gibson

FXStreet

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

GBP/USD flirts with tops near 1.3470

GBP/USD manages to regain composure and challenge the area of daily highs around 1.3470 on Friday. Cable picks up pace despite marginal gains in the Greenback in a context of swelling geopolitical tensions and rising global oil prices.

EUR/USD trims losses, back above 1.1500

EUR/USD picks up some pace and bouces off earlier lows, reclaiming the 1.1500 threshold and beyond at the end of the week. The pair’s modest pullback follows a persistent risk-averse market mood and renewed buying interest for the US Dollar.

Gold: The $4,000 mark holds the downside for now

Gold faces renewed selling pressure, falling sharply toweard the $4,000 mark per troy ounce as the US Dollar regains momentum. Escalating US-Iran tensions are keeping inflation concerns and expectations of further Fed rate hikes alive, weighing further on the yellow metal.

Bitcoin eyes 50-day EMA breakout, Ethereum consolidates, XRP steadies

Bitcoin, Ethereum, and Ripple trade near key technical levels on Friday as the broader cryptocurrency market pauses following last week's recovery. BTC is approaching the 50-day Exponential Moving Average while ETH continues to consolidate between two major EMAs.

Warsh needs to restore his reputation

We were glad to see our deeply negative reaction to the Warsh press conference was not some personal peculiarity. Just about everybody in the financial press felt the same way. The consensus is building it’s not the Fed in the dog-house but only Warsh. Today the WSJ changed it tune and blasted Warsh—"the honeymoon is already over..”

9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?

The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.