EUR/USD remains under pressure and breaches 1.1200

EUR/USD extends the selloff and breaks below 1.1200.
The greenback gains extra steam following the FOMC event.
Germany GfK Consumer Confidence improved to -6.7 in February.

Pablo Piovano FXStreet

Sellers remain well in control of the sentiment around the European currency and drag EUR/USD to fresh YTD lows near 1.1190 on Thursday.

EUR/USD weaker post-FOMC

EUR/USD loses ground for the fourth session in a row on Thursday and approaches the area of the 2021 lows in the 1.1190/85 band, always in response to the firmer tone in the US dollar.

Indeed, the demand for the greenback quickly picked up pace in the wake of the press conference by Chief Powell at the FOMC event on Wednesday.

Indeed, inflows into the buck accelerated after Powell suggested a rate hike in March and left the door open to further hikes at the subsequent meetings this year. It seems to be a matter of how many rate hikes and by how much that investors are expected to be discussing in the next months, putting the debate around the reduction of the balance sheet on the back burner for the time being.

Locally, the German Consumer Confidence measured by GfK improved a tad to -6.7 for the month of February.

Across the Atlantic, Durable Goods Orders, Pending Home Sales and the flash Q4 GDP figures are due later in the NA session.

What to look for around EUR

EUR/USD sold off and broke below the 1.1200 support for the first time since late December following the hawkish message from Chair Powell on Wednesday. Moving forward, dark clouds seem to be piling up when it comes to the outlook for the pair, particularly in light of the Fed’s imminent start of the tightening cycle vs. the accommodative-for-longer stance in the ECB, despite the high inflation in the euro area is not giving any things of cooling down for the time being. On another front, the unabated advance of the coronavirus pandemic remains as the exclusive factor to look at when it comes to economic growth prospects and investors’ morale in the region.

Key events in the euro area this week: Germany GfK Consumer Confidence (Thursday) – Germany Advanced Q4 GDP, EMU Final Consumer Confidence (Friday).

Eminent issues on the back boiler: Asymmetric economic recovery post-pandemic in the euro area. ECB stance/potential reaction to the persistent elevated inflation in the region. ECB tapering speculation/rate path. Italy elects President of the Republic in late January. Presidential elections in France in April.

EUR/USD levels to watch

So far, spot is losing 0.39% at 1.1197 and faces the next up barrier at 1.1314 (55-day SMA) seconded by 1.1369 (high Jan.20) and finally 1.1457 (100-day SMA). On the other hand, a break below 1.1193 (2022 low Jan.27) would target 1.1186 (2021 low Nov.24) en route to 1.1168 (low Jun.11 2020).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

AUD/USD falls to near 0.7100 after slipping below 50-day EMA

AUD/USD depreciates after registering minor gains in the previous day, trading around 0.7120 during the Asian hours. The technical analysis of the daily chart shows the pair consolidating sideways within a rectangle pattern, as neither bulls nor bears gain control. The AUD/USD pair is holding a slight bearish tone however as it sits beneath both the nine-day and 50-day EMAs.

160.00: USD/JPY back near intervention territory after upbeat US jobs report

US Nonfarm Payrolls beat expectations by a wide margin in May, with 172K jobs added. The US Dollar rebounds after the release, helping USD/JPY recover from its intraday lows. Warnings from Japanese authorities continue to limit upside potential near the 160.00 threshold.

Gold remains offered below $4,500 following US Payrolls

Gold prices trade with a bearish bias and still remain below the key $4,500 mark per troy ounce at the end of the week. The slighlty softer tone in the US Dollar alongside mixed US Treasury yields across the curve also keep the yellow metal’s downside somewhat contained.

Cardano hits five-year low even as Hoskinson clarifies "break" isn't an exit

Cardano (ADA) price is down 10% at press time on Friday, extending losses over 30% so far this week amid Charles Hoskinson's clarification that "break" isn't an exit.

Week ahead – Fed countdown begins amid US inflation data and geopolitical risks

Fed Chair Warsh’s first meeting approaches as key US inflation data could reshape expectations. Oil prices remain elevated as US-Iran talks continue; tariffs also return to the spotlight. ECB is expected to hike; will it be a one-off move or is July live?

The US economy defies the rules: 100 days into the Oil shock and the recession signal is still missing

More than three months after the start of the Iran war and the resulting disruption to global energy markets, the US economy continues to display remarkable resilience. The conflict has triggered a sharp rise in Oil prices, reignited inflationary pressures and fueled widespread concerns about a potential economic slowdown.