EUR/USD looks to extend the bounce above 1.1700, Italian politics in focus

Euro bounces as Eurosceptic Italy’s coalition government formation fails.
Corrective rally due on the cards ahead of the US NFP?

Dhwani Mehta FXStreet

The EUR bulls take a breather, leaving the EUR/USD pair in a phase of upside consolidation near the 1.17 handle, as markets await fresh developments surrounding the Italian political environment for the next push higher.

Focus on Italian politics at the start of the NFP week

The EUR/USD pair opened the NFP week with a bullish gap of 35-pips and extended the rebound from six-month lows of 1.1646 well above the 1.1700 levels, on the back of weekend’s news that the attempts at forming a coalition between the Five Star Movement and League have failed after Sergio Mattarella, the Italian President, vetoed the choice of economy minister, who was seen as anti-Euro.

The rebound in the Euro triggered fresh US dollar selling across the board, despite the news that North Korea’s leader Kim pushed to kick-start the talks with the US. The US President Trump twitted earlier today that the US team had arrived in North Korea to make arrangements for the Summit, according to Reuters.

The finding currency, Euro, also remains supported amid moderate risk-aversion persisting across Asia, as oil prices extending their selling spiral amid output boost talks. Meanwhile, slow volumes and illiquid trades could also help exaggerate the corrective pullback in the major from half-yearly lows. The UK and US markets are closed in observance of Spring Bank holiday and Memorial Day respectively.

Looking ahead, the focus remains on the Eurozone and US inflation gauges ahead of Friday’s crucial US non-farm payrolls release.

EUR/USD Technical Levels

Yue Wang, Co-Founder of Forexsignal.guru, notes: “According to Volume Profile study in Tradingview, long-term control point is around 1.1770. Below here, directly bearish toward 1.1594, 1.1550 or even 1.1474/40 could not be ruled out. Although downside may be limited from current levels (if seen, perhaps about 1-2 big figures...?）, I still suggest to well control the risk: partial close the long trade from 1.1655 and lower stop to 1.1530; or simply close the trade for some small profit and wait for better opportunities. Daily support Levels: 1.1625 1.1597 1.1582 1.1553. Daily resistance Levels: 1.1694 1.1705 1.1723 1.1732 1.1747.”

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

GBP/USD revisits 1.3530; Dollar pushes harder

GBP/USD adds to the weekly correction and recedes toward the 1.3530 zone on Friday. Indeed, Cable faces increasing selling pressure on the back of extra gains in the Greenback, particularly fuelled by Chair Warsh’s speech at the Jackson Hole Symposium and the US NFP Annual Revision (-79K).

EUR/USD breaches below 1.1600, multi-day lows

EUR/USD now accelerates its decline and retreats to seven-day troughs in the sub-1.1600 region at the end of the week. The pair’s pullback comes on the back of the strong rebound in the US Dollar after Chair Warsh delivered a hawkish message in Jackson Hole, while the US NFP Annual Revision came in at -79K.

Gold challenges its 200-day SMA near $4,530

Gold’s decline gathers fresh steam, hitting weekly lows while disputing its critical 200-day SMA near $4,530 per troy ounce. The yellow metal’s increasing weakness comes in response to the generalised upbeat tone in the US Dollar and the widespread rebound in US Treasury yields, as investors continue to reprice a Fed rate hike in September.

Crypto Today: Bitcoin, Ethereum, XRP rally loses steam despite steady ETF inflows

Bitcoin is back below $80,000 at the time of writing on Friday, after a second attempt at breaking resistance between $81,000 and $82,000. Meanwhile, Ethereum and Ripple mirror Bitcoin’s cooling trend, with ETH sliding to $2,500 and XRP falling toward $1.40 support.

Week ahead – RBNZ and BoC decide on rates ahead of all-important US NFP

Dollar rebounds ahead of ISM PMI and NFP data. RBNZ is expected to raise rates; focus to fall on forward guidance. BoC is set to remain on hold; will it raise rates in 2027?

Diesel’s record $100 warning: The oil shock hiding in plain sight

The Oil market may look calmer than it did a few months ago, but diesel is sending a very different message. The US diesel crack spread, the premium of ultra-low sulphur diesel futures over WTI, recently surged above $100 per barrel for the first time, reaching an intraday record of just over $102.00.