EUR/USD Current price: 1.2359
- EUR/USD edges lower, helped by divergent macroeconomic outcomes.
- Hopes about strong earnings send Wall Street up for a second consecutive day.
The EUR/USD dollar retreated from a weekly high of 1.2413 to settle around the 1.2360 level in the US afternoon, as the dollar finally found some demand, while European data fell short of market's expectations. While not a market mover, March Italian inflation grew by less-than-expected, supporting ECB's conservative stance regarding QE. Additionally, the monthly German ZEW survey showed that uncertainty coming from the US keeps denting investors confidence worldwide, with the index plummeting to-8.2 in the country for April, and the EU shrinking to 1.9 from the previous 13.4. US data, on the other hand, beat expectations with Housing Starts and Building Permits firmly up in March after falling the previous months, and Industrial Production advancing by more-than-expected, up 0.5% in the same month vs. the expected 0.4% gain. Capacity Utilization was also above forecast, printing 78.0% from the expected 77.9%.
Risk sentiment has improved drastically as investors are now focused on earnings reports, putting aside, at least temporarily, concerns about a trade war or geopolitical tensions in the Middle-East. Wall Street is firmly up for a second consecutive day, boosting demand for the vulnerable greenback. Wednesday will bring fresh EU inflation data, while the US has little to offer that can affect markets. Investors remain quite sensitive, and while concerns are now out of the picture, it doesn't mean they couldn't return out of the bloom.
Technically, failure to sustain gains beyond 1.2400 is quite discouraging for bulls, but the pair continues trading inside a familiar range, and the long-term symmetrical triangle that comes from mid-February. Halfway between the extremes of the figure, the 4 hours chart shows that the price settled around a directionless 20 SMA, while longer moving averages are also flat a few pips below the current level, reflecting the lack of a certain trend. Technical indicators in the mentioned chart have retreated sharply before bouncing modestly around neutral territory, indicating that, while the dollar is getting some attention today, remains far from strong. Below the 1.2300 region, chances turn to the downside for the short term, while a break beyond 1.2430 is now required to consider further gains ahead.
Support levels: 1.2335 1.2295 1.2250
Resistance levels: 1.2390 1.2435 1.2480
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
Editors’ Picks
EUR/USD treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.