EUR/USD - ‘Golden Cross’ & a pullback ahead of Draghi speech

Omkar Godbole FXStreet Contributor

A ‘Golden Cross’ i.e. a bullish crossover between 50-DMA and 200-DMA has yet again proved to be a laggard/contrary indicator. The bullish crossover, confirmed on the EUR/USD pair on May 23, has been followed by a pull back to 1.1165 (Asian session low).

Eyes Draghi speech

European Central Bank President Mario Draghi will address the European Parliament today at 13:00 GMT. Draghi had hailed Eurozone recovery during a speech in Madrid last week.

It is highly unlikely that Draghi would change the tune today. The President will most likely reiterate the last week’s message - "Eurozone is seeing an increasingly solid recovery, driven largely by a virtuous circle of employment and consumption, although underlying inflation pressures remain subdued". Hence, Draghi’s address to the EU Parliament could turn out to be a non-event for the EUR pairs.

The trading volumes are likely to be thin on account of the bank holiday in London. The US markets are closed on account of the Memorial Day holiday as well.

EUR/USD Technical Levels

The spot traded below the 10-DMA level of 1.1174 in Asia. An intraday break above 1.1268 (May 23 high) would expose US Election Day high of 1.1299. A daily close above 1.1299 would signal continuation of the rally from 1.0839 (May 11 low) and could yield 1.1366 (Aug 2016 high).

On the other hand, support is seen at 1.1075 (May 18 low), which, if breached, would open up downside towards 1.10 (zero levels). On a larger scheme of things, a daily close below 1.10 would signal a top has been made at 1.1268 (May 23 low) and shall expose the upward sloping 50-DMA currently seen at 1.0862.

Note - the daily RSI is turning lower from the overbought territory.

	TREND INDEX	OB/OS INDEX	VOLATILY INDEX
15M	Bearish	Oversold	Shrinking
1H	Strongly Bearish	Neutral	Low
4H	Bearish	Neutral	Expanding
1D	Bearish	Neutral	Expanding
1W	Bullish	Overbought	Expanding
Updated May 29, 03:00 GMT

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

AUD/USD sits near monthly high, around 0.7035 on hawkish RBA

AUD/USD trades around 0.7030-0.7035 in the Asian session on Thursday, near its monthly top, as recent hawkish comments from RBA officials continue to underpin the Australian Dollar. The US Dollar, meanwhile, struggles to lure buyers amid further declines in US bond yields, adding support to the pair. However, Fed rate-hike bets and geopolitical uncertainty help limit losses for the safe-haven buck, warranting caution for Aussie bulls.

USD/JPY remains confined in a familiar range; holds steady above 158.00

USD/JPY extends its consolidative price action through Thursday's Asian session, trading just above 158.00 amid diverging forces. Uncertainty over the timing of the next BoJ rate hike keeps Japanese Yen bulls on the defensive. The US Dollar, meanwhile, languishes near multi-week low amid declining US bond yields. Furthermore, looming intervention risks limit JPY losses and cap the pair. Traders also seem hesitant ahead of the Fed and BoJ meetings next week.

Gold hangs near one-week low; eyes $4,100 break amid Fed hike bets

Gold attracts fresh sellers in Thursday’s Asian session, sliding closer to a one-week low touched the previous day. Firming expectations for an imminent Fed rate hike, bolstered by oil-driven inflation risks, weigh on the non-yielding bullion. Meanwhile, declining US bond yields counter geopolitical uncertainty, keeping US Dollar bulls on the defensive. This helps XAU/USD defend $4,100.

Dogecoin Labs launches, resistance looms

Dogecoin (DOGE) Labs launched Wednesday in partnership with the Dogecoin Foundation, bringing together several product teams and technologies to expand the use of the memecoin (DOGE) across payments, decentralized finance (DeFi) and consumer applications. The launch will consolidate MyDoge, DogeOS and Such App under one business, led by Jordan Jefferson, founder of MyDoge and DogeOS.

What the midterm elections mean for Treasury yields, the Dollar and Gold

Democrats are priced to take the House, so November 3 comes down to the Senate and how much Washington can borrow without the other party. Treasury yields will show the answer first, then the Dollar and Gold. On November 3, Americans vote for all 435 House seats and 35 Senate seats. For bond prices, the result comes down to one thing: how much the government will borrow over the next two years.

The US Dollar fell. Gold didn't rally. That tells you everything

Gold (XAU/USD) is struggling to capitalize on a weaker US Dollar (USD), after repeatedly failing to establish itself above the $4,200 level. The precious metal remains confined to a relatively narrow trading range despite a combination of developments that would normally support higher prices.