- EUR/USD fades Monday’s uptick and revisits levels below 1.0800.
- Eurozone, Germany flash PMIs come in a mixed note in May.
- Housing data, advanced PMIs also in the limelight in the US docket.
The single currency loses some momentum and forces EUR/USD to recede to the sub-1.0800 region, or 2-day lows, on turnaround Tuesday.
EUR/USD weaker after PMIs, USD-buying
EUR/USD leaves behind two consecutive sessions with gains and refocuses on the downside on the back of mixed results from preliminary PMIs for both Germany and the broader Eurozone in May.
On the latter, and while the manufacturing sector remained weak, the services industry maintained its healthy momentum and is expected to have improved further during this month.
In the meantime, US debt-ceiling talks are predicted to keep ruling sentiment in global markets in the very near term, while speculation of further interest-rate hikes by the ECB at its meetings in June and July and probably September remain on the rise.
Across the pond, flash Manufacturing and Services PMIs for May are also due, along with New Home Sales and the speech by Dallas Fed President Lorie Logan.
What to look for around EUR
EUR/USD struggles to reclaim further ground and trades in a vacillating fashion around the key 1.0800 zone.
The movement of the euro's value is expected to closely mirror the behaviour of the US Dollar, which will likely be impacted by any differences in approach between the Fed and the ECB with regards to their plans for adjusting interest rates.
Moving forward, hawkish ECB-speak continue to favour further rate hikes, although this view appears in contrast to some loss of momentum in economic fundamentals in the region.
Key events in the euro area this week: Germany, EMU Advanced Manufacturing/Services PMI (Tuesday) – Germany IFO Business Climate (Wednesday) – Germany Final Q1 GDP Growth Rate, GfK Consumer Confidence (Thursday) – Italy, France Consumer Confidence (Friday).
Eminent issues on the back boiler: Continuation of the ECB hiking cycle in June, July and maybe September. Impact of the Russia-Ukraine war on growth prospects and inflation outlook in the region, particularly risks of inflation becoming entrenched.
EUR/USD levels to watch
So far, the pair is losing 0.20% at 1.0791 and faces immediate contention at 1.0759 (monthly low on May 19) seconded by 1.0712 (low on March 24) and finally 1.0516 (low on March 15). On the upside, a break above 1.0872 (55-day Simple Moving Average) would target 1.1000 (round level) en route to 1.1095 (2023's high on April 26).
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
AUD/USD hovers around 0.6500 amid light trading, ahead of US GDP
AUD/USD is trading close to 0.6500 in Asian trading on Thursday, lacking a clear directional impetus amid an Anzac Day holiday in Australia. Meanwhile, traders stay cautious due ti risk-aversion and ahead of the key US Q1 GDP release.
USD/JPY finds its highest bids since 1990, near 155.50
USD/JPY keeps breaking into its highest chart territory since June of 1990 early Thursday, testing 155.50 for the first time in 34 years as the Japanese Yen remains vulnerable, despite looming Japanese intervention risks. Focus shifts to Thursday's US GDP report and the BoJ decision on Friday.
Gold price treads water near $2,320, awaits US GDP data
Gold price recovers losses but keeps its range near $2,320 early Thursday. Renewed weakness in the US Dollar and the US Treasury yields allow Gold buyers to breathe a sigh of relief. Gold price stays vulnerable amid Middle East de-escalation, awaiting US Q1 GDP data.
Injective price weakness persists despite over 5.9 million INJ tokens burned
Injective price is trading with a bearish bias, stuck in the lower section of the market range. The bearish outlook abounds despite the network's deflationary efforts to pump the price. Coupled with broader market gloom, INJ token’s doomed days may not be over yet.
Meta Platforms Earnings: META sinks 10% on lower Q2 revenue guidance Premium
This must be "opposites" week. While Doppelganger Tesla rode horrible misses on Tuesday to a double-digit rally, Meta Platforms produced impressive beats above Wall Street consensus after the close on Wednesday, only to watch the share price collapse by nearly 10%.