EUR/USD Analysis: Fed’s Williams send the USD nose-diving
EUR/USD Current Price: 1.1275
- ECB said to revamp its inflation goal of “below but close to 2.0%.”
- Dovish comments from Fed’s Williams triggered a dollar-sell of by the end of the US session.
- EUR/USD trapped between Fibonacci levels for a second consecutive day.
The EUR/USD pair has advanced early Thursday to 1.1243 on the back of dollar’s weakness. Nevertheless, the common currency is among the worst performers against the American currency, taking a hit during European trading hours from headlines suggesting that ECB’s members are studying the possibility of revamping their inflation target. There was no official word on the issue, but the news was enough to send the pair down to 1.1204. As the greenback was unable to attract speculative interest, the pair was able to post a modest recovery to settle around 1.1220, later jumping to fresh daily highs in the 1.1270 region, following dovish comments from Fed’s Williams. Williams pledge to take a preventive approach on rates than to wait for disaster to unfold.
There were no economic releases in the EU, while the US published Initial Jobless Claims for the week ended July 12 which met the market’s expectations by printing 216K, while the Philadelphia Fed Manufacturing Survey surprised in July by printing 21.8, well above the expected 5.0 and the previous 0.3. Friday will bring minor data from the Union, as Germany will publish June PPI, while the EU will publish May’s Current Account. The US will reveal the preliminary estimate of the July Michigan Consumer Sentiment Index, foreseen at 98.5 vs. the previous 98.2.
EUR/USD short-term technical outlook
The EUR/USD pair has broken above the 23.6% retracement of the latest daily slide measured between 1.1411 and 1.1181, and daily basis, it posted a higher high and a higher low. The 100 DMA converges with the mentioned Fibonacci level, now reinforcing its relevance as support. Shorter term, and according to the 4 hours chart, the pair is close to entering bullish ground, as it surpassed its 20 SMA while technical indicators turned sharply higher, moving into positive territory, yet the 100 SMA is crossing below the 200 SMA, both around the 38.2% retracement of the mentioned decline around 1.1280, the level to surpass to confirm additional gains ahead.
Support levels: 1.1240 1.1180 1.1150
Resistance levels: 1.1280 1.1315 1.1350
Author
Valeria Bednarik
FXStreet
Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.
