- EUR/USD refreshes intraday high while snapping six-day downtrend near the lowest levels since 2017.
- Off in Japan, cautious mood ahead of the key data triggers consolidation of recent losses.
- Eurozone GDP is likely to improve during Q1 2022, US PCE Price Index may ease to 5.3% YoY.
- Hawkish comments from ECB policymakers, recently mixed US GDP can strengthen recovery moves.
EUR/USD renews intraday high around 1.0530 while portraying the corrective pullback near the lowest levels since 2017 during Friday’s Asian session.
The major currency pair’s recent gains could be linked to the US dollar’s pullback amid an absence of bond moves and the market’s cautious sentiment ahead of the key Eurozone and the US data.
A Showa Day Holiday in Japan turns down bond traders on Friday and limits the strong positive catalyst for the US dollar, namely the US Treasury yields.
The bond coupons eased 4.2 basis points (bps) to 2.82% by the end of Thursday’s US session. The pullback in the Treasury yields, as well as the US dollar, could also be linked to the mixed US Gross Domestic Product (GDP) release.
The Q1 2022 US GDP dropped to -1.4% from 6.9% prior, versus the 1.1% forecast. However, the details concerning the personal consumption, inventories and net trade which flashed positive signs seemed to have helped the EUR/USD bears on Thursday.
It’s worth noting that the Eurozone GDP is likely to improve to 5.0% YoY versus 4.6% prior, per the seasonally adjusted Q1 2022 figures, which in turn shows a better number than the US and hence may favor the EUR/USD rebound. Also likely to underpin the recovery moves are the hawkish comments from the European Central Bank (ECB) policymakers. Recently, European Central Bank (ECB) Vice President Luis de Guindos said on Thursday that the “surge in energy prices is reducing demand and raising production costs.”
On other hand, the Fed’s preferred inflation gauge, from the US Core Personal Consumption Expenditures Price Index for March, expected to ease to 5.3% YoY versus 5.4% prior, will also be important to watch for near-term EUR/USD directions.
Additionally, Russia’s tussles with the West and Ukraine, as well as China’s covid woes, are additional catalysts for the EUR/USD traders to watch.
Also read: EUR/USD Forecast: Euro remains bearish with a strong support above 1.0460
Technical analysis
Unless rising back beyond a five-month-old descending trend line, around 1.0600 by the press time, EUR/USD prices are directed towards the year 2017 trough surrounding 1.0340.
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 extends gains due to improved risk appetite
The Australian Dollar maintained its winning streak for the fourth consecutive session on Monday, buoyed by a hawkish sentiment surrounding the Reserve Bank of Australia. This optimism bolsters the strength of the Aussie Dollar, providing support to the AUD/USD pair.
USD/JPY snaps three-day losing streak above 153.50, Yellen counsels caution on currency intervention
The USD/JPY pair snap a three-day losing streak during the Asian trading hours on Monday. The uptick of the pair is bolstered by the modest rebound of the US Dollar and US Treasury Secretary Janet Yellen’s comments on potential Japanese interventions last week.
Gold price rebounds on downbeat NFP data, softer US Dollar
Gold price snaps the two-day losing streak during the Asian session on Monday. The weaker-than-expected US employment reports have boosted the odds of a September rate cut from the US Federal Reserve. This, in turn, has dragged the US Dollar lower and lifted the USD-denominated gold.
Bitcoin Cash could become a Cardano partnerchain as 66% of 11.3K voters say “Aye”
Bitcoin Cash is the current mania in the Cardano ecosystem following a proposal by the network’s executive inviting the public to vote on X, about a possible integration.
Week ahead: BoE and RBA decisions headline a calm week
Bank of England meets on Thursday, unlikely to signal rate cuts. Reserve Bank of Australia could maintain a higher-for-longer stance. Elsewhere, Bank of Japan releases summary of opinions.