EUR/USD analysis: downward pressure eases, bearish trend intact

Valeria Bednarik FXStreet

EUR/USD Current price: 1.1862

Mild USD correction complete, now waiting for US inflation.
EUR/USD will likely resume its decline on a break below 1.1800, eyeing then 1.1660.

A light macroeconomic calendar favored a dollar's downward correction against its European rivals this Wednesday, but the greenback remained unabatedly as the strongest currency across the board and resumed its advance post-US opening. US Treasury yields regained the upside after US President Trump decided to pull the US out from the Iranian deal and increase sanctions on the country, with the 10-year note spending the day hovering around 3.0% and the 2-year note yield reaching a new high since 2008 at 2.53%. The EUR/USD pair fell intraday to 1.1822 and peaked at 1.1896 early US session, after the only piece of relevant data missed expectations, as US PPI advanced less than anticipated in April any way up 2.6% YoY, down from the previous 3.0%, while the core yearly figure resulted at 2.3% from the previous 2.7% and the expected 2.4%. Markets are now waiting for US April CPI to be out this Thursday, expected to remain above 2.0%, and hardly a game changer for the Fed. Still, a result above market's expectations will likely boost the already bullish greenback.

Technically, the pair retains its bearish trend, and the 4 hours chart shows that the latest peak met once again selling interest around a firmly bearish 20 SMA. In the same chart, technical indicators have corrected oversold readings, with the Momentum still advancing below its mid-line, but the RSI having already lost directional strength, now consolidating around 36. The decline has been quite straight and bigger time frames indicate that the pair is overextended, with shy signs of downward exhaustion appearing, yet not enough to confirm a bottom underway. A more consistent upward correction is not out of the table, particularly if US data disappoints big, yet a break below 1.1800 will reduce chances of such event, and favor a downward extension towards 1.1660.

Support levels: 1.1840 1.1800 1.1775

Resistance levels: 1.1900 1.1940 1.1990

View Live Chart for the EUR/USD

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.

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.