- US Dollar gains momentum during the American session amid risk aversion.
- Key data ahead: US GDP on Thursday and Euro area inflation on Friday.
- EUR/USD hits fresh 13-month highs but retreats again.
Despite reaching fresh YTD highs and rising on Wednesday, the bullish outlook for the EUR/USD in the short term has remained unchanged. The pair was rejected from the recent top and pulled back as the US Dollar strengthened. The time for a rally above 1.1050 is running out.
The German Gfk Consumer Confidence survey improved in May from -29.3 to -25.7. On Thursday, Eurozone (EZ) consumer confidence data is due. The crucial day will be Friday, with German inflation and EZ GDP growth. Next week is the European Central Bank (ECB) meeting. A rate hike looks like a done deal, but the question remains: 25 or 50. The latest round of data favors a 50 basis points hike but renewed banking concerns and slowing inflation offers arguments to doves.
The Euro outperformed on Wednesday, while the US Dollar posted mixed results. On the same day, EUR/USD hit fresh 13-month highs, and AUD/USD and NZD/USD dropped to the lowest in a month. However, the Dollar ended the day stronger as Wall Street slipped again. On Thursday, the US will report Q1 GDP and Consumer inflation, critical numbers ahead of next week’s FOMC meeting.
EUR/USD short-term technical outlook
-638181368637372024.png)
The EUR/USD rose on Wednesday and peaked at 1.1094, the highest level since March 2022, then pulled back below 1.1050. The trend is up and solid; however, the Euro failed again to make a sustainable run toward 1.1100. The more it takes, the more likely it is to stage a deep correction. But with critical events ahead, investors may stay on the sidelines.
The daily charts show EUR/USD supported by a bullish 20-day Simple Moving Average (SMA) at 1.0950. The 4-hour chart presents the pair above an uptrend line. Fresh highs are on the table as long as it remains above 1.0970; a break below would initially target 1.0950 and then 1.0910.
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.