EUR/USD Forecast: Breaking higher on ECB, trade, and finally looking a bit bullish

The EUR/USD is extending its gains and reaches the highest levels in two weeks.
Trade-related USD weakness and optimism about the ECB are the primary drivers.
The technical picture is almost entirely balanced after a long time in the doldrums.

Yohay Elam FXStreet

The EUR/USD is moving higher, trading above 1.1750 and at the highest levels since May 23rd. The latest boost for the common currency came from reports that the European Central Bank will have a live discussion on exiting the QE program in its upcoming meeting on June 14th. So far, the ECB seemed to be trying to push the decision to the last moment. The current scheme consists of buying €30 billion per month through September. Markets expect the program to be reduced afterward and end at the end of the year.

After the recent rate decision in April, Draghi said there was no discussion about monetary policy, and his words weighed on the Euro. The reports about a discussion join the beat in euro-zone inflation seen reported last week. It is also joined by relatively upbeat speeches by ECB members Praet, Hanson, and Weidmann. All expressed confidence in reaching the 2% inflation target.

The Euro initially stabilized on political calm in Italy. After a turbulent week that saw fears of an Italexit swell, the populist government won votes of confidence in both chambers of parliament. The policies that will come from the new government still cause concern, but these concerns are sidelined now.

In the US, the Trump Administration is not relenting on steel and aluminum tariffs on the EU nor its NAFTA partners. Moreover, the Top Economic Adviser Larry Kudlow said Trump is contemplating splitting NAFTA into separate deals with Canada and Mexico. The tough approach to trade weighs on the US Dollar.

EUR/USD Technical Analysis

The EUR/USD not only broke above the downtrend resistance line but is now also seeing its RSI move towards the balanced territory of 50. Also, downward momentum which dominated the pair for a long time has now diminished.

1.1767 is the immediate battle line after supporting the pair on its way down. The May 9th low of 1.1822 is the next level to watch. 1.1915 was the January low and is next.

On the downside we find 1.1648 which was the close on May 25th, followed by 1.1610, a stepping stone on the way down, and finally the low point of 2018 which was 1.1510.

More: EUR/USD targets 1.1870 after the big breakout — Confluence Detector

Author

Yohay Elam

FXStreet

Yohay is in Forex since 2008 when he founded Forex Crunch, a blog crafted in his free time that turned into a fully-fledged currency website later sold to Finixio.

EUR/USD flirts with daily highs, retargets 1.1900

EUR/USD regains upside traction, returning to the 1.1880 zone and refocusing its attention to the key 1.1900 barrier. The pair’s slight gains comes against the backdrop of a humble decline in the US Dollar as investors continue to assess the latest US CPI readings and the potential Fed’s rate path.

GBP/USD remains well bid around 1.3650

GBP/USD maintains its upside momentum in place, hovering around daily highs near 1.3650 and setting aside part of the recent three-day drop. Cable’s improved sentiment comes on the back of the Greenback’s irresolute price action, while recent hawkish comments from the BoE’s Pill also collaborate with the uptick.

Gold clings to gains just above $5,000/oz

Gold is reclaiming part of the ground lost on Wednesday’s marked decline, as bargain-hunters keep piling up and lifting prices past the key $5,000 per troy ounce. The precious metal’s move higher is also underpinned by the slight pullback in the US Dollar and declining US Treasury yields across the curve.

Crypto Today: Bitcoin, Ethereum, XRP in choppy price action, weighed down by falling institutional interest

Bitcoin's upside remains largely constrained amid weak technicals and declining institutional interest. Ethereum trades sideways above $1,900 support with the upside capped below $2,000 amid ETF outflows.

Week ahead – Data blitz, Fed Minutes and RBNZ decision in the spotlight

US GDP and PCE inflation are main highlights, plus the Fed minutes. UK and Japan have busy calendars too with focus on CPI. Flash PMIs for February will also be doing the rounds. RBNZ meets, is unlikely to follow RBA’s hawkish path.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.