EUR/USD tumbles to two-month low amidst US debt-ceiling concerns, strong US economic data


  • EUR/USD hits a two-month low amidst US debt-ceiling uncertainty and positive US economic data.
  • Fitch places US “AAA” debt rating on negative watch despite lower unemployment claims and a rise in Q1 GDP.
  • Germany’s Q1 GDP plunge puts additional pressure on the Euro, with central bank commentary stirring markets.

EUR/USD continued to fall for three straight days and reached a new two-month low of 1.0707, as the greenback remains strengthening across the FX board. Uncertainty around the US debt-ceiling discussions and upbeat US economic data bolstered the US Dollar (USD). Therefore, the EUR/USD is trading at 1.0725 after hitting a high of 1.0756.

German recession adds weight to falling Euro, as central bank comments stir sentiment

US debt-ceiling discussions resumed on Wednesday, with US GOP House Speaker Kevin McCarthy saying that he does not expect an agreement today, tough added there has been “some progress” between both parties. Woes of a potential US default bolstered the US Dollar, though Fitch Ratings warned that US “AAA” debt ratings were put on negative watch.

On another front, data from the US Bureau of Labor Statistics (BLS) revealed that unemployment claims for the last week rose by 229K below estimates of 245K, signaling a solid labor market. At the same time, growth in the US for the first quarter was upwardly revised, revealing the BLS. Gross Domestic Product (GDP) rose by 1.3%, against the preliminary 1.1% figure, portraying a solid economy.

On the Eurozone (EU) front, the largest economy of the bloc, Germany, was in recession in Q1 as GDP plunged 0.3%, weighing on the Euro (EUR), which extended its losses from 1.0740 toward the 1.0710 area.

In the meantime, central bank speakers crossed the wires on both sides of the Atlantic. On the US front, Boston Fed President Susan Collins commented that the time to pause its tightening cycle is getting closer. On Wednesday, the Fed revealed its May minutes, showing policymakers are leaning towards pausing hikes, though officials did not commit to writing off interest rate increases.

Across the pond, the European Central Bank (ECB) member Klass Know said that “at least” two more rate hikes of 25 bps are needed in the Euro Area and stressed the need to stay put for a significant time.

EUR/USD Technical Levels

EUR/USD

Overview
Today last price 1.0726
Today Daily Change -0.0024
Today Daily Change % -0.22
Today daily open 1.075
 
Trends
Daily SMA20 1.0916
Daily SMA50 1.09
Daily SMA100 1.0813
Daily SMA200 1.0476
 
Levels
Previous Daily High 1.0801
Previous Daily Low 1.0748
Previous Weekly High 1.0904
Previous Weekly Low 1.076
Previous Monthly High 1.1095
Previous Monthly Low 1.0788
Daily Fibonacci 38.2% 1.0769
Daily Fibonacci 61.8% 1.0781
Daily Pivot Point S1 1.0731
Daily Pivot Point S2 1.0713
Daily Pivot Point S3 1.0678
Daily Pivot Point R1 1.0784
Daily Pivot Point R2 1.0819
Daily Pivot Point R3 1.0837

 

 

Share: Feed news

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.

Recommended content


Recommended content

Editors’ Picks

EUR/USD stays below 1.0700 after upbeat US PMI data

EUR/USD stays below 1.0700 after upbeat US PMI data

EUR/USD stays on the back foot and trades in negative territory below 1.0700 as the US Dollar benefits from upbeat data in the American session. S&P Global reported that the economic activity in the US private sector continued to expand at a robust pace in June.

EUR/USD News

GBP/USD drops to fresh multi-week low below 1.2650

GBP/USD drops to fresh multi-week low below 1.2650

GBP/USD remains under bearish pressure and trades at its lowest level since mid-May below 1.2650. The stronger-than-forecast Manufacturing and Services PMI data from the US helps the USD hold its ground and causes the pair to stretch lower.

GBP/USD News

Gold drops below $2,340 as US yields rebound

Gold drops below $2,340 as US yields rebound

Gold loses its traction and trades deep in the red below $2,340 in the second half of the day on Friday. The benchmark 10-year US Treasury bond yield pushes higher following the upbeat PMI data from the US, weighing on XAU/USD.

Gold News

Bitcoin retraces to crucial support

Bitcoin retraces to crucial support

Bitcoin price encounters resistance at weekly highs before retracing to seek support at a crucial level, while Ethereum and Ripple align closely with Bitcoin's movements, gearing up to surpass resistance barriers and embark on upward rallies.

Read more

Week ahead – US PCE inflation the highlight of a relatively light agenda

Week ahead – US PCE inflation the highlight of a relatively light agenda

Core PCE inflation to test bets of two Fed rate cuts in 2024. Yen awaits BoJ Summary of Opinions, Tokyo CPI. Canadian CPI data also enters the spotlight.

Read more

Forex MAJORS

Cryptocurrencies

Signatures