EUR/USD: technically back below bullish conditions, target 55-day ma at 1.0674?

Ross J Burland FXStreet

Currently, EUR/USD is trading at 1.0753, down -0.56% on the day, having posted a daily high at 1.0828 and low at 1.0740.

EUR/USD is consolidating the recent drop from the 1.09 handle from the start of this week targeting the 200 smoothed sma at 1.0735. While there were headlines suggesting that the ECB's message at its March 9 meeting has been overinterpreted by the markets as a step to exit, the negotiations between the EU and Brexit are also due to start now that PM May triggered Article 50. This is potentially a far greater risk over the medium term weighing on the euro with much of the downside in sterling already priced in. EUR/GBP has reversed its gains on the 0.87 handle and has dropped to 0.8623 lows today.

EUR/USD near-term risks

In the near term and within a month, the French elections will take the limelight. however, it is unlikely that LePen will win, but NOT impossible should the 35% of those who are yet to vote to decide to come forward in the second round and do a Brexit/Trump style ambush on the status quo. Given Le Pens anti-EU and euro campaign, that could seriously hurt the euro on such headlines.

With an improved risk sentiment in markets, for now, the dollar is outperforming the euro as yields move up and stock markets rally. The GOP this week confirmed their commitment to tax reform and that has fueled a bullish scenario for US markets once again, supporting a bid in the greenback.

Intermarket VIX: a safe ride for risk-on markets, or is it?

EUR/USD levels

On a technical basis, the bullish case has neutralized while the euro failed to close 1.0877 200 day moving average. With this break below the 1.08-handle there are mounting risks to the downside. "Below 1.0760 will alleviate immediate upside pressure and trigger a slide back to the 55-day ma at 1.0674," explained analysts at Commerzbank.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

EUR/USD onsolidates around mid-1.1800s as traders keenly await FOMC Minutes

The EUR/USD pair struggles to capitalize on the previous day's goodish rebound from the 1.1800 neighborhood, or a one-and-a-half-week low, and consolidates in a narrow band during the Asian session on Wednesday. Spot prices currently trade just below mid-1.1800s, nearly unchanged for the day.

GBP/USD bounces off lows, retargets 1.3550

After bottoming out just below the 1.3500 yardstick, GBP/USD now gathers some fresh bids and advances to the 1.3530-1.3540 band in the latter part of Tuesday’s session. Cable’s recovery comes as the Greenback surrenders part of its advance, although it keeps the bullish bias well in place for the day.

Gold bounces back toward $4,900, looks to FOMC Minutes

Gold is attempting a bounce from the $4,850 level, having touched a one-week low on Tuesday. Signs of progress in US–Iran talks dented demand for the traditional safe-haven bullion, weighing on Gold in early trades. However, rising bets for more Fed rate cuts keep the US Dollar bulls on the defensive and act as a tailwind for the non-yielding yellow metal. Traders now seem reluctant ahead of the FOMC Minutes, which would offer cues about the Fed's rate-cut path and provide some meaningful impetus.

DeFi could lift crypto market from current bear phase: Bitwise

Bitwise Chief Investment Officer Matt Hougan hinted that the decentralized finance sector could lead the crypto market out of the current bear phase, citing Aave Labs’ latest community proposal as a potential signal of good things to come.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.

Ripple slides to $1.45 as downside risks surge

Ripple edges lower at the time of writing on Tuesday, from the daily open of $1.48, as headwinds persist across the crypto market. A short-term support is emerging at $1.45, but a buildup of bearish positions could further weaken the derivatives market and prolong the correction.