EURUSD
In March, Eurozone headline inflation was confirmed at 6.9% YoY, and the European Central Bank (ECB) officials continue to indicate the possibility of further rate hikes. ECB Chief Economist Philip Lane has stated that a rate hike in May is probable, and the size of the hike will be determined by the data. The upcoming S&P Global PMIs on Friday will provide new insights into economic activity. Isabel Schnabel noted that although inflation has started to decline, underlying inflation remains stubborn. The ECB will release the minutes of its latest meeting on Thursday, and the markets have fully priced in a 25 bps rate hike in May.
The EURUSD has maintained its adherence to the upper channel and is currently trading at the resistance level of 1.0980. If the price manages to break through this level, it may advance further towards the last resistance at 1.1075. However, if there is a sell-off, the pair may break the strong bullish trend channel and enter a new price action for a downturn. On the 4H chart, the 100 MA is likely to be the first support, followed by 1.0885.
The EURUSD has maintained its adherence to the upper channel and is currently trading at the resistance level of 1.0980. If the price manages to break through this level, it may advance further towards the last resistance at 1.1075. However, if there is a sell-off, the pair may break the strong bullish trend channel and enter a new price action for a downturn. On the 4H chart, the 100 MA is likely to be the first support, followed by 1.0885.
Support: 1.0920– 1.0885 – 1.0840
Resistance: 1.0965 – 1.1000 – 1.1045
EURUSD
The dollar has strengthened as traders anticipate upcoming central bank policy meetings that could provide insight into when the current trend of rising global interest rates may end. The Federal Reserve is expected to implement a 25-basis points rate hike at next week’s FOMC meeting, but the focus will be on the future rate path guidance. While some parts of the US economy have remained resilient, recent economic data points towards slowing growth, and inflation remains a concern, leading traders to debate the scale of potential rate cuts expected later in the year.
Data released on Friday showed that U.S. and euro zone business activity gathered pace in April, reducing concerns about an impending recession in major economies.
The EUR/USD pair has declined after reaching the 1.10 resistance level, and the price action has formed a descending triangle on DXY, suggesting that the market is waiting for news and data to provide clarity on direction. The 100MA is the key support level to monitor on the 4H chart for either a rejection or a breakout that could result in further selloff.
Support: 1.0920– 1.0885 – 1.0840
Resistance: 1.0965 – 1.1000 – 1.1045
EURUSD
The euro continued its upward momentum, rising above $1.10 overnight and reaching $1.1056 in Asia. However, trade was relatively thin due to holidays in Australia and New Zealand, as well as anticipation of central bank meetings in Japan, the US, and Europe. ECB board member Isabel Schnabel stated that a 50 bp rate hike was still on the table and would depend on data, especially inflation figures that were due two days before May’s meeting. In contrast, French ECB policymaker Francois Villeroy de Galhau called for further rate hikes to be limited in number and size in an interview with Le Figaro. Despite this, markets have remained focused on the fact that more rate hikes are still expected. Commerzbank believes that the euro will trade steadily against the dollar ahead of the Federal Reserve and European Central Bank’s interest rate decisions on May 3 and 4, respectively. Currently, the euro is perceived as the market’s preferred currency due to the perception that the ECB is more restrictive, while the Fed may be nearing the end of its rate hike cycle. Additionally, the US debt ceiling and concerns about US banks are seen as headwinds for the dollar.The EUR/USD pair continued its bullish trend and remained close to touching the previous high point from April 14. The decline in the value of the dollar and US yields has provided support for the upward movement of the pair, and the price action suggests that the bullish trend remains strong and unstoppable.
Support: 1.0920– 1.0885 – 1.0840
Resistance: 1.0965 – 1.1000 – 1.1045
EURUSD
On Tuesday, the EUR/USD experienced a sharp decline due to risk aversion, failing to maintain a position above 1.1000 and eventually dropping to as low as 1.0963. The negative sentiment was influenced by renewed banking concerns, leading to a boost in the US Dollar and an increase in the US Dollar Index (DXY) by 0.55%, despite the sinking US yields. However, this move in Treasuries was counterbalanced by a rally in German bonds, causing the German 10-year yield to fall 6.5% to 2.34%.
Comments from ECB officials regarding further rate hikes were still prevalent, with Isabel Schnabel indicating that “data dependence means that a 50-basis points rate hike is not off the table.” Meanwhile, Chief Economist Philip Lane commented that macroeconomic figures suggest a need to increase rates. However, market participants are currently viewing a 25-bps rate hike as the more likely scenario.
The long bullish trend is still holding above the 100SMA support level on the 4H chart. The European session is currently seeing a positive movement that may push the price towards the last resistance level at 1.1070. The US Dollar Index (DXY) also shows a bearish picture, and further selloff is expected to continue.
Support: 1.0920– 1.0885 – 1.0840
Resistance: 1.0965 – 1.1000 – 1.1045
EURUSD
The US Banking Crisis Revives Rate Cut Speculations and Weighs on USD, While Improving German Consumer Sentiment Boosts EUR/USD
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The recent report of significant customer withdrawals at First Republic Bank in the US has reignited concerns about banking contagion risks, alongside the ongoing debt ceiling standoff and fears of a US economic recession. These worries have led to renewed speculation about a rate cut by the Federal Reserve later this year, which has put pressure on the USD and supported the EUR/USD pair. In contrast, the Euro received support from Germany’s improving consumer sentiment, with the Gfk Consumer Confidence index rising for the seventh consecutive month. Furthermore, the expectations of additional rate hikes by the European Central Bank added to the EUR/USD’s upward momentum. Despite strong US Durable Goods Orders, which exceeded expectations, the USD failed to make gains against the Euro.
Support: 1.1030– 1.1100 – 1.1000
Resistance: 1.10850 – 1.1125 – 1.1150
EURUSD
The EUR/USD is facing a hectic day with several economic indicators on the calendar. The first noteworthy data point is German retail sales figures, which will be released before the European market opens. Although this will impact the EUR/USD, more attention is likely to be focused on the manufacturing sector PMI numbers for Italy and Spain, as well as the finalized PMIs for France, Germany, and the Eurozone.
Following the disappointing Q1 GDP numbers in the euro area, weak manufacturing PMI figures could raise doubts about the ECB’s optimistic economic outlook and policy goals. Nevertheless, the primary concern remains inflation, and preliminary euro area inflation numbers for April will take center stage later in the day. If inflation figures are high, it could increase the likelihood of a 50-basis point interest rate hike on Thursday. Economists expect Eurozone core inflation to remain constant at 5.7%.
Investors should keep an eye on the comments from ECB members given the busy economic calendar. One of the members, Andrea Enria from the ECB Executive Board, is scheduled to speak today. Additionally, it is advisable to monitor the media for any statements or remarks from other ECB officials.
Support: 1.0920– 1.0885 – 1.0840 Resistance: 1.0965 – 1.1000 – 1.1045
EURUSD
EUR/USD gathered bullish momentum and registered its highest daily close in over a year above 1.1050 on Wednesday. The pair continued to stretch higher toward 1.1100 early Thursday before going into a consolidation phase. The European Central Bank (ECB) will announce its policy decisions later in the day and the pair could extend its rally in case the ECB’s outlook highlights a widening policy divergence with the US Federal Reserve (Fed).
On Wednesday, the Fed announced that it raised the policy rate by 25 basis points (bps) to the range of 5-5.25% as expected. In the policy statement, the Fed scrapped the language saying that it “anticipates” further rate increases would be needed. During the post-meeting press conference, FOMC Chairman Jerome Powell refrained from committing to a pause in rate hikes in June and said that they were not planning to cut rates this year. Powell’s comments, however, failed to convince markets and the CME Group FedWatch Tool shows that the probability of another rate hike in June is virtually 0.
The ECB is forecast to raise its key rates by 25 bps. During the month of April, several ECB policymakers noted that they could opt for another 50-bps hike in May but developments since then caused markets to lean toward a smaller rate increase. Earlier this week, the ECB’s Bank Lending Survey revealed the negative impact of high rates on credit demand.
Support: 1.1060– 1.1040 – 1.1000 Resistance: 1.0450 – 1.1100 – 1.1200
EURUSD
EUR/USD rebounds from one-month low, benefiting from a technical correction and improved market sentiment in the European morning. The pair manages to minimize its losses, with risk perception likely to influence trading dynamics leading up to the weekend.
The recent University of Michigan Sentiment report attracts significant attention, revealing higher-than-anticipated consumer expectations for inflation over the next one year and 5-10 years. This surprising trend persists despite the sentiment gauges falling short of expectations. The persistent concern among most Americans regarding rising prices may have potential economic implications in the future.
Key resistance levels to monitor for potential upward movements in the EURUSD pair are located at 1.0900, 1.0935, and 1.0950. Conversely, significant support levels to keep an eye on for potential downward movements are situated at 1.0850, 1.0800, and 1.0750. The 100MA on the Daily chart AT 1.0800is the most anticipated level to watch for EURUSD
Support 1.0910, 1.0850, and 1.0800
Resistance 1.0940, 1.0980, and 1.1000
EURUSD is near key bullish trend line (had two price touches previously), false breakdown is highly likely but I don’t believe in extended downside, support should appear somewhere near 1.08, then powerful rebound.
EURUSD
The positive sentiment in equity markets led to the selling of the safe-haven US Dollar (USD), supporting the major currency pair. The USD was further weakened by the disappointing Empire State Manufacturing Index, which dropped significantly to -31.8 in May from April’s reading of 10.8. Additionally, the decline in the Michigan Consumer Sentiment Index contributed to the USD’s weakness.
The USD was also affected by declining US Treasury bond yields due to the government’s borrowing limit standoff. US President Joe Biden expressed optimism about reaching a deal on the borrowing limit
From a technical standpoint, the recovery after the 1.0850 level may take the pair more toward the last support of 1.0900, and after it the 1.0940. The 100MA on the Daily chart held as expected and played a strong support level as is the case for the DXY.
Key resistance levels to monitor for potential upward movements in the EURUSD pair are located at 1.0900, 1.0940, and 1.0960. Conversely, significant support levels to keep an eye on for potential downward movements are situated at 1.0850, 1.0800, and 1.0770.
Support 1.0850, 1.0800, and 1.0770…
Resistance 1.0900, 1.0940, and 1.0960
EURUSD
President Joe Biden and top congressional Republican Kevin McCarthy have made progress in their negotiations to raise the U.S. debt ceiling, although a final agreement has not been reached yet. Biden emphasized the severe consequences of a potential default, warning that it could lead the economy into a recession. As a result, investors view the U.S. dollar as a safe haven,considering the negative global impact such a scenario could have.
The prospects of imminent interest rate cuts in the United States were diminished by the strong growth in consumer spending observed in April, along with hawkish statements from Federal Reserve officials. Austan Goolsbee, the President of the Chicago Federal Reserve, expressed that it was premature to discuss rate cuts at this stage. Similarly, Loretta Mester, the President of the Cleveland Federal Reserve, stated that the central bank could not maintain interest rates at current levels given persistent inflationary pressures.
From a technical perspective, the currency pair initially corrected towards 1.09000 but subsequently resumed its bearish downtrend, finding support at 1.0850. There is a higher likelihood of a breakout below this level, which is further reinforced by a similar inverted pattern observed on the DXY (Dollar Index).Key resistance levels to monitor for potential upward movements in the EURUSD pair are located at 1.0900, 1.0940, and 1.0960. Conversely, significant support levels to keep an eye on for potential downward movements are situated at 1.0850, 1.0800, and 1.0770.
Support 1.0850, 1.0800, and 1.0770… Resistance 1.0900, 1.0940, and 1.0960
EURUSD
President Joe Biden expressed confidence that the United States will not default on its debt, while House Speaker Kevin McCarthy stated that reaching an agreement this week is achievable. Following a meeting in Washington to discuss the debt limit, JPMorgan Chase & Co. CEO Jamie Dimon remarked that it is highly unlikely for the US government to default on its debt.
European Central Bank Vice President Luis de Guindos acknowledged that the ECB has largely completed its tightening measures, but there is still progress to be made. The euro showed minimal movement in response to this statement.
In terms of the economic calendar, it is worth noting that there is an upcoming speech by Lagard, which could hold significance for the markets. Additionally, ECB Vice President De Guindos will also be speaking.
From a technical standpoint, the currency pair has retraced to validate 1.0850 as a newfound resistance level, indicating a continuation of the downward movement, which suggests a healthy bearish trend. Similarly, the DXY (Dollar Index) reflects an inverse pattern, with increased buying pressure on the Dollar. Looking ahead, a significant target for EURUSD lies at 1.0750 on the 4-hourly chart, as well as the 100-day moving average (MA) on the Daily chart.
| Res Level 3 |
Res Level 2 |
Res Level 1 |
Sup level 1 |
Sup level 2 |
Sup level 3 |
| 1.9000 |
1.0870 |
1.0850 |
1.0800 |
1.0750 |
1.07000 |
EURUSD
Investors closely watched the face-to-face negotiations between US President Joe Biden and House Speaker Kevin McCarthy on raising the US debt ceiling. Unfortunately, the two-hour meeting concluded without reaching an agreement. President Biden criticized Republicans for their reluctance to impose additional taxes on the wealthy, while Democrats are considering spending cuts. McCarthy proposed an 8% reduction in overall spending for the CY2024 budget and urged Democrats to return to the CY2022 budget plan to avoid further budget deficits.
US Treasury Secretary Janet Yellen continues to emphasize the looming risk of a default, stressing the urgency to address obligated payments before the June 1 deadline.
Fed Bank President Neel Kashkari expressed his support for keeping interest rates steady in June, highlighting the potential for ongoing challenges despite signs of improvement in the banking sector.
In contrast, St. Louis Fed Bank President James Bullard emphasized the Fed’s commitment to combating inflation amidst a robust labor market. He suggested that the policy rate may need to increase by 50 basis points (bps) this year.
European Central Bank (ECB) President Christine Lagarde has previously cautioned that multiple interest rate hikes are necessary to address persistent inflationary pressures.
The EURUSD pair is once again showing downward momentum, retracing towards the previous support level of 1.0760. At the same time, the DXY (US Dollar Index) is steadily rising and approaching a significant confluence point at 103.60. Upon analyzing the daily chart, it is evident that the price found temporary support at the lower parallel of the bullish channel. However, there is continued pressure on the EUR, increasing the likelihood of a potential breakout.
EURUSD
Investors’ concerns about a potential US default are growing as negotiations on the debt limit show no signs of progress. US House Speaker Kevin McCarthy’s comments indicate a lack of agreement between Republicans and the White House. The absence of fresh commentary from President Joe Biden is adding to market anxiety, with Treasury Secretary Janet Yellen warning of dire consequences if funds run out by June 1. Investors are eagerly awaiting the release of the Federal Open Market Committee (FOMC) minutes for insights into the recent interest rate hike and future guidance.
The Euro saw mixed results with manufacturing contracting and services showing improvement. Attention is now focused on European Central Bank President Christine Lagarde’s upcoming speech, where she is expected to address June’s monetary policy and the need for interest rate hikes to combat Eurozone inflation.
The EURUSD pair is potentially forming a double bottom pattern, indicating a potential reversal, with the 1.0760 support level being a key factor. The next resistance levels to watch are at 1.0830 and 1.0850, particularly the upper parallel of the bearish channel. A closer look at the daily chart reveals that the price has temporarily found support at the lower parallel of the bullish channel. Nevertheless, there is still ongoing downward pressure on the EUR.
EURUSD
On Thursday, the dollar reached a two-month high against a group of other currencies, as concerns grew regarding a potential catastrophic default by the United States. This came after the ratings agency Fitch placed the country’s “AAA” debt ratings on negative watch. Paradoxically, the demand for safe-haven assets has led to the strengthening of the greenback, despite the looming deadline of June 1, referred to as the “X-date,” when the Treasury has warned of its inability to fully meet its financial obligations.
According to data released by the statistics office, the German economy contracted in the first quarter of 2023 compared to the preceding three months, indicating that it has entered a recession. The second estimate reveals that gross domestic product (GDP) declined by 0.3% for the quarter, after adjusting for price and calendar effects.
The EURUSD pair experienced a significant downward breakout following fundamental factors that favored the safe-haven dollar and weaker economic data from Germany. The breach of the 1.07500 support level has now created an opportunity for further selling pressure, potentially driving the price towards the round number of 1.0700, and subsequently towards 1.0540. Upon closer analysis of the daily chart, a clear bearish momentum is evident, with the next notable support level expected to be around the 1.0550 area.
The USD Index is finding support by its role of safe heaven and also due yesterday GDP and Labor market Data indicating more resilient Economy and tight Labor market. The market priced a 0.25% added hike by the FED as a result. Tight credit conditions from US regional banks are dampening inflationary pressures, leading to speculation of a potential pause in rate hikes during the upcoming June monetary policy meeting. Meanwhile, the German economy has officially entered a recession, with consecutive quarters of contraction, including a 0.3% decline in Q1 real Gross Domestic Product (GDP) and a 0.5% contraction in Q4 of the previous year. These developments may prompt the European Central Bank (ECB) to focus on the economic outlook before addressing inflationary pressures. ECB policymaker Klaas Knot has advocated for two more policy rate increases, followed by a significant period of rate stability.
The EURUSD pair has confirmed a breakout from the long bullish channel, which has opened the door for further selling pressure. Although the pair temporarily found support around 1.0700, recent German and US data, as well as potential developments today, suggest that the market may continue to exert downward pressure on the Euro. The next significant point of confluence can be observed on the Daily chart around the 200MA.
EURUSD
The US President, Joe Biden, and the top congressional Republican, along with House Speaker Kevin McCarthy, have reached an agreement to raise the federal government’s debt ceiling of $31.4 trillion until January 2025. Over the weekend, President Biden strongly urged both chambers to pass the agreement, and McCarthy seems to have no difficulties in getting it approved in the House. However, some policymakers have expressed their discomfort with the compromises made to avoid a default on debt payments, which challenges the positive outlook of the market on this crucial issue.
Furthermore, the release of optimistic data last week, including Durable Goods Orders and the Core Personal Consumption Expenditure (PCE) Price Index, which is the preferred inflation gauge of the Federal Reserve, has reinforced expectations of a more hawkish stance from the Fed. This has put downward pressure on the EUR/USD price. Additionally, concerns about a downward revision of Germany’s Q1 2023 growth numbers have renewed fears of a recession in the region and have influenced the more hawkish members of the European Central Bank (ECB).
The EUR/USD pair found support at 1.0700, signaling a potential reversal in the making. The resolution of the debt ceiling issue may shift the sentiment from risk-off to risk-on, benefiting the Euro and weakening the Dollar’s status as a safe haven. The key resistance levels to monitor are 1.0750 and 1.0800, while the support levels are at 1.0700 and 1.0600.
EURUSD
On Monday, the Euro struggled against the US Dollar, continuing its negative trend. Tuesday will see the release of Spain’s preliminary report on the Consumer Price Index (CPI) for May, providing insight into price behavior for the current month. This data holds significance for both European Central Bank (ECB) officials and market expectations.
The US Dollar showed mixed performance on Monday, influenced by an improvement in risk sentiment. The DXY index gained a modest 0.1%, allowing it to close at its highest level in two months, above 104.20. With expectations shifting from a potential pause at the next Federal Open Market Committee (FOMC) meeting to a 25-basis-point interest rate hike, any potential decline in the US Dollar is expected to be limited.
US markets remained closed on Monday for Memorial Day, resulting in a quieter trading session. Market participants analyzed the weekend’s agreement in Washington to suspend the debt limit. However, the legislation still requires approval from Congress, so the situation demands continued attention.
The EUR/USD pair is currently testing the 1.0700 level, indicating a potential continuation towards the next significant level around 1.0500 on a daily chart. The DXY index continues to exhibit strong momentum, suggesting the possibility of further gains for the US Dollar toward its next target around the 105.60 which also represent the 200MA.
EURUSD
Consumer spending in April exceeded expectations and undermined the possibility of a neutral interest rate policy by the Federal Reserve. Despite Fed Chair Jerome Powell mentioning that further rate hikes are less appropriate due to tight credit conditions, the focus now shifts to the upcoming release of the United States Nonfarm Payrolls (NFP) data on Friday.
In France, consumer price inflation decreased to 5.1 percent year-on-year in May 2023, compared to 5.9 percent the previous month. This marks the lowest level since April 2022, indicating a potential slowdown in inflationary pressures in the second-largest economy in Europe. The release of German Unemployment CPI data today will provide further insights into the overall health of the largest economy in Europe and help confirm or contradict the slowing French inflation data.
Despite these developments, the European Central Bank (ECB) is expected to maintain a hawkish stance in June due to significant divergence from the desired inflation target of 2%. In addition to the Eurozone, other factors and events will likely impact the market especially President Lagarde Speaks.
The EUR/USD pair confirmed a breakout below the 1.0700 level at the start of the European session, indicating a downward movement towards the next target around the 1.0500 area. The DXY index also followed a similar path, confirming the bearish trend and advancing towards the significant resistance level of 105.6 on the Daily chart.
EURUSD
Softer consumer inflation data from France and Germany dampened expectations for rate hikes by the European Central Bank (ECB), which could act as a headwind for the euro. However, several ECB officials still support the possibility of additional rate increases in the coming months. ECB Vice President Luis de Guindos emphasized that the battle against inflation is not over, while ECB policymaker Madis Muller indicated that core inflation remains strong, suggesting the likelihood of multiple rate hikes. These remarks align with comments from ECB Governing Council member Gediminas Šimkus, who expects rate increases in June and July. On the other hand, Federal Reserve Governor Philip Jefferson suggested a pause in rate hikes at the next FOMC meeting to allow for further data analysis, emphasizing that a pause does not imply that rates have peaked. Philadelphia Fed President Patrick Harker also favored a pause but noted that incoming data could alter his stance. Additionally, progress in avoiding a potential US debt default, with the US House of Representatives voting in favor of a bill to suspend the debt ceiling, has kept the US dollar below its recent highs.
The EUR/USD pair confirmed the 1.0700 as new resistance level after it was a strong support indicating a downward movement towards the next target around the 1.0500 area. The DXY index also followed a similar path, confirming the bearish trend and advancing towards the significant resistance level of 105.6 on the Daily chart.
