• EUR/USD pares the biggest daily gains in 11 weeks around a fortnight top.
  • Risk-aversion, pre-data/event anxiety weigh on the pair prices.
  • ECB vs. Fed appears the key catalyst, preliminary EU/US PMIs for May also seem important for immediate directions.
  • EU oil embargo, China’s covid conditions are extra signals for better forecasting.

EUR/USD takes offers to renew intraday low around 1.0665 as it consolidates the previous day’s run-up, the heaviest since late March, near a two-week top during Tuesday’s mid-Asian session. In doing so, the major currency pair respects the market’s risk-off mood, as well as anxiety, ahead of top-tier data/events. Also weighing on the quote are the recently hawkish comments from the Fed policymakers, as well as the US-China jitters.

Contrary to the neutral comments from the Fed policymakers, San Francisco Federal Reserve Bank President Mary Daly and Kansas City Fed President Esther George sound hawkish in their latest comments. “I think that we can weather this storm, get the interest rate up...price stability restored and still leave Americans with jobs a plentiful and with growth expanding as we expect it to," said Fed’s Daly during an interview with Fox News on Monday. On the same line, Fed’s George expects the US central bank to lift its target interest rate to about 2% by August.

Elsewhere, US Trade Representative (USTR) Katherine Tai poured cold water on the face of expectations that the Sino-American jitters will be eased soon, at least for the trade concerns. The US diplomat said, “We're still working on next actions with China,” while turning down the optimism triggered by US President Joe Biden’s comments suggesting a reversal of the Trump-era tariffs on China.

Furthermore, major banks’ downgrade of the US and Chinese economic forecasts also keep the risk-aversion on the table and weigh on the EUR/USD prices.

It should be noted that the cautious mood ahead of the Quad Summit in Tokyo and the preliminary readings of the US and Eurozone S&P Global Manufacturing and Services PMIs for May drown the risk appetite and favor the pair sellers. On the same line are the scheduled speeches from Fed Chairman Jerome Powell and ECB President Christine Lagarde.

To portray the mood, S&P 500 Futures drop 0.70% to 3,940 whereas the US 10-year Treasury yields fade from the previous day’s rebound from the monthly low of around 2.85%.

Looking forward, Eurozone PMIs may portray the economic conditions in the bloc and can recall the bulls should the outcome challenges the current pessimism, mainly due to the Russia-Ukraine war. Following that, the art of central bankers in defending the respective economies, while also taming the inflation fears, will be crucial for the EUR/USD traders. Given the recently hawkish ECB speak, contrary to Powell’s repetitive remarks, the pair sellers have a tough road to tackle.

Also read: US S&P Global May PMI Preview: Recession worries are high, but what of probabilities?

Technical analysis

EUR/USD prices keep the previous day’s upside break of a descending line from late March, around 1.0560, despite the latest pullback. Also likely to challenge the pair’s further downside is the early-month swing high near 1.0640.

Meanwhile, the previous support line from early March, around 1.0840 by the press time, restricts the short-term upside of the pair.

Additional important levels

Overview
Today last price 1.0665
Today Daily Change -0.0025
Today Daily Change % -0.23%
Today daily open 1.069
 
Trends
Daily SMA20 1.0534
Daily SMA50 1.0774
Daily SMA100 1.1019
Daily SMA200 1.1279
 
Levels
Previous Daily High 1.0698
Previous Daily Low 1.0552
Previous Weekly High 1.0607
Previous Weekly Low 1.0389
Previous Monthly High 1.1076
Previous Monthly Low 1.0471
Daily Fibonacci 38.2% 1.0642
Daily Fibonacci 61.8% 1.0608
Daily Pivot Point S1 1.0596
Daily Pivot Point S2 1.0502
Daily Pivot Point S3 1.0451
Daily Pivot Point R1 1.0741
Daily Pivot Point R2 1.0792
Daily Pivot Point R3 1.0886

 

 

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.

Feed news Join Telegram

Recommended content


Recommended content

Editors’ Picks

EUR/USD steadies near 1.0550, looks to post modest weekly gains

EUR/USD steadies near 1.0550, looks to post modest weekly gains

EUR/USD has lost its bullish momentum after having climbed above 1.0570 with the initial reaction to the US data in the American session and retreated toward the mid-1.0500s. On a weekly basis, the pair remains on track to close in positive territory. 

EUR/USD News

GBP/USD struggles to hold above 1.2300

GBP/USD struggles to hold above 1.2300

GBP/USD has edged lower following a jump above 1.2300 in the early American session on Friday. The market mood remains upbeat ahead of the weekend with Wall Street's main indexes posting strong daily gains on upbeat US data. 

GBP/USD News

Gold stays below $1,830 as US yields edge higher

Gold stays below $1,830 as US yields edge higher

Gold continues to fluctuate below $1,830 on Friday and looks to close the second straight week in negative territory. Fueled by the risk-positive market environment, the benchmark 10-year US Treasury bond yield is up more than 1% on the day, limiting XAU/USD's upside.

Gold News

Why Cardano could surprise over the weekend

Why Cardano could surprise over the weekend

ADA  set to close out the week with a gain on the workday trading week and over the weekend? Central banks signaled that the rate hike cycle is ending, meaning less stress and tight conditions for trading, opening up room for some upside potential with Cardano set to pop above $0.55 and test a significant cap.

Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!

BECOME PREMIUM

Forex MAJORS

Cryptocurrencies

Signatures