EUR/USD Forecast: Bearish pressure mounts

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.0785

Economic downturn in Europe and the US much worse than anticipated.
US Durable Goods Orders seen plummeting by 11.9% in March.
EUR/USD poised to retest the year low at 1.0678.

The EUR/USD pair is ending Thursday in the red around the 1.0760 price zone, after an intense day. Macroeconomic data triggered intraday action for a change, although the numbers exposed the harm made by the ongoing pandemic on economics. The preliminary Markit estimates for April activity collapsed ar both shores of the Atlantic. The German manufacturing index fell to 34.3 while services output contracted to 15.9. For the whole Union, the manufacturing PMI resulted at 33.6, while the services index plunged to 11.7, all record lows. Also, the German GFK Consumer Confidence Survey for May plummeted to -23.4 against the previous 2.7, while the ECB announced that it would accept some junk-rated debt as collateral to mitigate the impact of possible rating downgrades.

The pair fell to 1.0755 on the back of dismal EU data, the recovering to 1.0846 as US macroeconomic releases were also quite discouraging. Initial Jobless Claims for the week ended April 17, which resulted at 4427K worse than the expected 4200K but better than the previous 5237K. The Markit preliminary estimate of the April Manufacturing PMI fell to 36.9, while the services index declined to 27, both at historical lows. The economic contraction is both economies, was blamed to the coronavirus crisis.

This Friday, Germany will publish the April IFO Survey, with the Business Climate seen down to 80 in April from 86.1 in March. The US will publish Durable Goods Orders for March, seen plunging by 11.9% and the final reading of the Michigan Consumer Sentiment Index for April foreseen at 68 vs 71 previously estimated.

EUR/USD short-term technical outlook

The EUR/USD pair has finished the day below the 61.8% retracement of its latest daily advance at around 1.0830, with sellers rejecting attempts to advance beyond the level. The short-term picture is bearish, as, in the 4-hour chart, moving averages keep gaining downward strength above the current level, with the 20 SMA converging with the mentioned Fibonacci level. Technical indicators turned south below their midlines, but remain within familiar levels. The risk is skewed to the downside, toward the base of the range at 1.0678.

Support levels: 1.0750 1.0710 1.0680

Resistance levels: 1.0790 1.0830 1.0860

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.