EUR/USD Current price: 1.1685
- EU May preliminary Markit PMI softened for a fourth consecutive month.
- Chances of a US rate hike for June increased after FOMC's optimistic words.
The dollar retook the market's lead and advanced against most of its major rivals, reaching fresh multi-month highs against the GBP and the EUR, as risk-off dominated the financial world, while the mentioned currencies suffered from own data woes. The clear exemption was, of course, the safe-haven yen. The common currency was undermined by another round of softer-than-expected Markit PMI figures, as the preliminary May indexes for the region indicated that business activity slowed for a fourth consecutive month, and stands at its lowest in a year and a half. For the whole EU, the Manufacturing index printed 54.5 from the previous 56.2, while for the services sector, the index shrunk to 55.5 from 56.2 in April. Additionally, Consumer Confidence in the EU fell to 0.2 in May, below the previous 0.3 and the expected 0.4. In the US, New Home Sales fell by less-than-expected in April, down by 1.5%, while the May preliminary Markit PMI surprised to the upside, with business activity picking up to its highest in three months. The FOMC Meeting's Minutes released mid-US afternoon showed that officers are confident that the next rate hike will likely be "soon" and that a modest "overshoot" on inflation could be "helpful."
Thursday's macroeconomic calendar will include the German GFK Consumer Confidence survey, and Q1 GDP, and US weekly unemployment claims report alongside with Existing Home Sales and the Kansas Fed Manufacturing index for May.
The EUR/USD pair extended its decline post-FOMC's Minutes, heading into the Asian opening below the 1.1700 figure, and poised to extend its decline according to intraday technical readings, as in the 4 hours chart, the pair is back below its 20 SMA after a false bullish breakout earlier this week. Technical indicators in the mentioned chart have accelerated south below their midlines, with the RSI currently nearing oversold readings. The pair has a strong static mid-term support at 1.1660, and a break below it should lead to a steeper slide regardless oversold conditions.
Support levels: 1.1660 1.1620 1.1590
Resistance levels: 1.1720 1.1750 1.1785
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 stays near 1.0400 in thin holiday trading
EUR/USD trades with mild losses near 1.0400 on Tuesday. The expectation that the US Federal Reserve will deliver fewer rate cuts in 2025 provides some support for the US Dollar. Trading volumes are likely to remain low heading into the Christmas break.
GBP/USD struggles to find direction, holds steady near 1.2550
GBP/USD consolidates in a range at around 1.2550 on Tuesday after closing in negative territory on Monday. The US Dollar preserves its strength and makes it difficult for the pair to gain traction as trading conditions thin out on Christmas Eve.
Gold holds above $2,600, bulls non-committed on hawkish Fed outlook
Gold trades in a narrow channel above $2,600 on Tuesday, albeit lacking strong follow-through buying. Geopolitical tensions and trade war fears lend support to the safe-haven XAU/USD, while the Fed’s hawkish shift acts as a tailwind for the USD and caps the precious metal.
IRS says crypto staking should be taxed in response to lawsuit
In a filing on Monday, the US International Revenue Service stated that the rewards gotten from staking cryptocurrencies should be taxed, responding to a lawsuit from couple Joshua and Jessica Jarrett.
2025 outlook: What is next for developed economies and currencies?
As the door closes in 2024, and while the year feels like it has passed in the blink of an eye, a lot has happened. If I had to summarise it all in four words, it would be: ‘a year of surprises’.
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.