- EUR/USD steadies around weekly top following the heavy run-up.
- Hawkish ECBspeak, EU GDP data favored Euro bulls amid market’s cautious optimism.
- US dollar stayed pressured despite firmer US statistics, upbeat yields.
- Second-tier data may entertain traders, risk catalysts are more important for fresh impulses.
EUR/USD bulls take a breather around mid-1.0500s, the weekly high, after positing the heaviest daily jump since early March. That said, the major currency pair has been trading inside a 30-pip range during the last hours of Tuesday, after a stellar rise, poking the range high surrounding 1.0550 as Asian traders brace for Wednesday’s work,
A fresh round of hawkish comments from the European Central Bank (ECB) policymakers has been the key support to the regional currency. Among them, Tuesday’s comments from European Central Bank (ECB) Governing Council member Klaas Knot was the most hawkish and fuelling the EUR/USD prices. ECB’s Knot told the Dutch TV that a 50 basis points (bps) rate hike should not be excluded if data in the next few months suggest that inflation is broadening and accumulating. On the same line were comments from European Central Bank Governing Council member Mario Centeno said on Tuesday that the normalization of monetary policy is desired and must happen, reported Reuters.
Additionally favoring the EUR/USD bulls was a slightly better-than-forecast reading of the preliminary Eurozone GDP for Q1 2022. The bloc’s GDP rose past 5.0% YoY to 5.1% while also rising above 0.2% QoQ expectations to 0.3%.
On the other hand, Fed Chairman Jerome Powell repeated his usual push for the 50 bps rate hike and didn’t surprise markets, despite pausing equity bulls. However, St Louis Fed President and outspoken hawkish FOMC member James Bullard’s preference for a 50 bps move, versus the previous support to the 75 bps action, seemed to have weighed on the US dollar. That said, the US Treasury yields remained firmer, up nearly 10 bps to 2.99% at the latest.
Talking about the US data, US Retail Sales rose at a pace of 0.9% MoM in April, slightly better than the expected pace of 0.7% but softer than the upwardly revised 1.4% growth (from 0.5%). US Retail Sales ex Autos, popularly known as Core Retail Sales, rose 0.6% MoM in April versus the 0.4% expected gain. It is worth noting that there was a big upward revision to the previous month’s Core Retail Sales figures, to 2.1% MoM versus the prior estimate of 1.1%.
Elsewhere, improvement in covid conditions in China previously spread optimism in Asia, backed by softer US data. However, fears emanating from the Russia-Ukraine tussles challenge the bulls.
Moving on, final readings of Eurozone HICP for April precedes the US housing numbers to entertain EUR/USD traders. However, major attention will be given to talks of rate hikes, inflation and growth, not to forget covid and geopolitics, for clear directions.
A previous support line from late 2021 challenges immediate EUR/USD upside around 1.0550 ahead of the 21-DMA hurdle surrounding 1.0575. Meanwhile, a fresh downside can aim for April’s low of 1.0471.
Additional important levels
|Today last price||1.0549|
|Today Daily Change||0.0112|
|Today Daily Change %||1.07%|
|Today daily open||1.0437|
|Previous Daily High||1.0443|
|Previous Daily Low||1.0389|
|Previous Weekly High||1.0592|
|Previous Weekly Low||1.035|
|Previous Monthly High||1.1076|
|Previous Monthly Low||1.0471|
|Daily Fibonacci 38.2%||1.0423|
|Daily Fibonacci 61.8%||1.041|
|Daily Pivot Point S1||1.0403|
|Daily Pivot Point S2||1.0369|
|Daily Pivot Point S3||1.0349|
|Daily Pivot Point R1||1.0457|
|Daily Pivot Point R2||1.0477|
|Daily Pivot Point R3||1.0511|
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.