EUR/USD retreats towards 1.2100 on US dollar rebound


  • EUR/USD fades bounce off intraday low, snaps two-day uptrend.
  • Risk sentiment dwindles amid economic concerns over China, UN headlines.
  • US data helped Fed to defend an easy money policy, for now.
  • Fedspeak, geopolitics and second-tier US economics should offer fresh impulse.

EUR/USD drops back towards the intraday low of 1.2129, down 0.14% on a day, heading into Monday’s European open. In doing so, the currency major pair consolidates gains earned during the previous two-day run-up amid the US dollar’s corrective pullback.

The US dollar index (DXY) rises 0.10% to 90.38 by the press time as market sentiment seeks clear direction after the latest optimism favored bulls. Also challenging the mood could be the downbeat data from China as well as the one-week-old Israel-Palestine tussles.

Although Friday’s downbeat US Retail Sales and Michigan Consumer Sentiment Index, not to forget Industrial Production, saved the Fed policymakers from another laborious day. Markets players reassess the US central bank’s rejection to tapering and/or rate hike odds afterward.

Further, comments from China’s National Bureau of Statistics (NBS) suggesting economic recovery remains uneven, mainly due to the recently sluggish Retail Sales and Industrial Production, also weigh on the sentiment. Elsewhere, the United Nations (UN) rejection to any direct meddling in Gaza, due to the US as per China, joins the coronavirus (COVID-19) woes in Asia and uneven vaccinations, not to forget covid variant woes in the West, to exert additional downside pressure on the previous optimism.

It should, however, be noted that the Fedspeak suggesting the need for “multiple data of more months” for any policy adjustments seem justified, which in turn keeps bears cautious.

Amid these plays, S&P 500 Futures print mild losses whereas the US 10-year Treasury yields drop 1.5 basis points (bps) to 1.62% by the press time.

Looking forward, New York Empire State Manufacturing PMI and US NAHB Housing Market Index for May, expected 24 and 83 versus 26.3 and 83 priors in that order, will decorate the calendar. However, major attention will be given to the Fedspeak. Fed’s Vice Chairman Richard Clarida is likely to reiterate his cautious optimism while defending the no policy adjustments, in absence of which the EUR/USD may witness further downside towards short-term key support.

Technical analysis

A pullback from the 1.2180 hurdle favors EUR/USD sellers targeting an ascending support line from March-end, around 1.2080.

Additional important levels

Overview
Today last price 1.2132
Today Daily Change - 18 pips
Today Daily Change % -0.15%
Today daily open 1.215
 
Trends
Daily SMA20 1.2078
Daily SMA50 1.1958
Daily SMA100 1.2045
Daily SMA200 1.1957
 
Levels
Previous Daily High 1.215
Previous Daily Low 1.2071
Previous Weekly High 1.2182
Previous Weekly Low 1.2052
Previous Monthly High 1.215
Previous Monthly Low 1.1713
Daily Fibonacci 38.2% 1.212
Daily Fibonacci 61.8% 1.2101
Daily Pivot Point S1 1.2097
Daily Pivot Point S2 1.2044
Daily Pivot Point S3 1.2018
Daily Pivot Point R1 1.2177
Daily Pivot Point R2 1.2203
Daily Pivot Point R3 1.2256

 

 

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