- EUR/USD remains on the defensive near 1.1050.
- EMU Flash CPI surprised to the upside in March.
- Markets’ attention now shifts to US Payrolls.
The selling bias still prevails around the European currency, with EUR/USD hovering around 1.1050 at the end of the week.
EUR/USD weaker on USD recovery, looks to NFP
EUR/USD extends the bearish note in the second half of the week on the back of the resumption of the demand for the greenback and unabated jitters surrounding the war in Ukraine.
Indeed, the bid bias in the dollar has been recently reignited following another failed attempt to advance on a negotiated solution to the Russia-Ukraine conflict, which has in turn forced spot to abandon the area of tops in the 1.1180/85 band (March 31).
The move lower in the pair comes in tandem with the continuation of the decline in the German 10y bund yields, down for the second straight session around the 0.57% area.
In the domestic docket, flash figures showed the CPI in the broader Euroland is expected to have risen 7.5% in the year to March and 3.0% when it comes to the Core CPI. Earlier in the session, the final Manufacturing PMI came at 56.9 and 56.5 in Germany and the EMU, respectively, for the month of March.
In the NA calendar, all the attention will be on the publication of the Nonfarm Payrolls for the month of March along with the Unemployment Rate and the ISM Manufacturing.
What to look for around EUR
EUR/USD extends recent losses and retests the 1.1050 zone in response to further improvement in the mood around the buck. As usual, pockets of strength in the single currency should appear reinforced by the speculation of the start of the hiking cycle by the ECB at some point by year end, while higher German yields, elevated inflation, the decent pace of the economic recovery and auspicious results from key fundamentals in the region are also supportive of a rebound in the euro.
Key events in the euro area this week: Final EMU, Germany Manufacturing PMI, EMU Flash Inflation Rate (Friday).
Eminent issues on the back boiler: Asymmetric economic recovery post-pandemic in the euro area. Speculation of ECB tightening/tapering later in the year. Presidential elections in France in April. Impact of the geopolitical conflict in Ukraine.
EUR/USD levels to watch
So far, spot is losing 0.17% at 1.1047 and faces the next up barrier at 1.1184 (weekly high March 31) followed by 1.1187 (55-day SMA) and finally 1.1243 (100-day SMA). On the other hand, a drop below 1.0944 (weekly low March 28) would target 1.0900 (weekly low March 14) en route to 1.0805 (2022 low March 7).
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 clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.