- EUR/USD is trading sideways above 1.0700, and remains lackluster despite approval of the US debt-ceiling raise.
- In spite of the German recession, the ECB is expected to raise interest rates further.
- EUR/USD has slipped below the 61.8% Fibonacci retracement at 1.0738.
The EUR/USD pair is showing a back-and-forth action above the round-level support of 1.0700 in the Asian session. The major currency pair is expected to remain in action as the proposal of raising the $31.4 trillion US borrowing limit has been approved for two years after compromising for the budget’s spending initiatives by Democrats.
The US Dollar Index (DXY) is facing barricades in extending its recovery above 104.30 despite the Federal Reserve (Fed) is expected to continue its policy-tightening regime after observing persistence in US households’ spending.
Despite a record of recession in the German economy after showing contraction in Gross Domestic Product (GDP) numbers consecutively for two quarters, the European Central Bank (ECB) is expected to raise interest rates further to tame stubborn inflation. ECB President Christine Lagarde has already announced that more than one interest rate hike is anticipated to bring down inflation.
EUR/USD has slipped below the 61.8% Fibonacci retracement (plotted from March 15 low at 1.0516 to April 26 high at 1.1095) at 1.0738 on a four-hour scale. The 20-period Exponential Moving Average (EMA) at 1.0740 is acting as a strong barrier for the Euro bulls. The asset is auctioning in a Falling Channel in which each pullback is considered as a selling opportunity by market participants.
The Relative Strength Index (RSI) (14) is oscillating in the bearish range of 20.00-40.00, indicating the continuation of the bearish momentum.
The downside move will resume if the shared currency pair drops below the round-level support of 1.0700. This will drag the asset toward March 13 low at 1.0650 followed by March 03 low at 1.0588.
On the flip side, a recovery move above May 24 high around 1.0800 would push the ball in Euro’s court. A solid recovery above 1.0800 would drive the asset toward May 18 high at 1.0848 and May 16 high at 1.0904.
EUR/USD four-hour chart
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
EUR/USD retreats below 1.0700 after US GDP data
EUR/USD came under modest bearish pressure and retreated below 1.0700. Although the US data showed that the economy grew at a softer pace than expected in Q1, strong inflation-related details provided a boost to the USD.
GBP/USD declines below 1.2500 as USD rebounds
GBP/USD declined below 1.2500 and erased the majority of its daily gains with the immediate reaction to the US GDP report. The US economy expanded at a softer pace than expected in Q1 but the price deflator jumped to 3.4% from 1.8%.
Gold drops below $2,320 as US yields shoot higher
Gold lost its traction and turned negative on the day below $2,320 in the American session on Thursday. The benchmark 10-year US Treasury bond yield is up more than 1% on the day above 4.7% after US GDP report, weighing on XAU/USD.
XRP extends its decline, crypto experts comment on Ripple stablecoin and benefits for XRP Ledger
Ripple extends decline to $0.52 on Thursday, wipes out weekly gains. Crypto expert asks Ripple CTO how the stablecoin will benefit the XRP Ledger and native token XRP.
After the US close, it’s the Tokyo CPI
After the US close, it’s the Tokyo CPI, a reliable indicator of the national number and then the BoJ policy announcement. Tokyo CPI ex food and energy in Japan was a rise to 2.90% in March from 2.50%.