EUR/USD Current Price: 1.0914
- Concerns about global economic growth undermined the market mood.
- United States housing-related figures beat expectations, fueling USD demand.
- EUR/USD buyers battling to maintain it above the 1.0900 threshold.
The EUR/USD pair fell to 1.0891 on Tuesday as a dismal market mood backed the US Dollar. Financial markets struggle to digest fresh concerns about China’s economic health after the local central bank cut key interest rates by 10 bps. The People’s Bank of China (PBoC) cut the one-year loan prime rate to 3.55% and the five-year loan prime rate to 4.2%. Financial markets doubted the trims were enough and sought refugee in the American currency.
EUR/USD managed to recover some ground during London trading hours. European Central Bank (ECB) Governing Council member Olli Rehn hit the wires. Rehn noted that underlying inflation is easing only gradually “but not to the extend desired.” His hawkish words reaffirmed the message delivered by the central bank last week and came as a no-surprise to financial markets.
Also, the Eurozone published the April Current Account, which posted a seasonally adjusted surplus of €4 billion, much lower than anticipated. Construction Output also missed expectations, declining by 0.4% MoM in the same month.
Upbeat United States data gave the US Dollar the final push, as Building Permits were up by 5.2% MoM in May, while Housing Starts surged 21.7%, well above the market’s expectations. US indexes plunged, while the Greenback advanced against most of its major rivals.
The US Dollar retains its strength ahead of the most relevant event of the week, Federal Reserve (Fed) Chairman Jerome Powell’s semi-annual testimony before Congress. His prepared remarks will be out way ahead of the event, but the latter includes a Q&A from lawmakers. The testimony extends for two days, although Powell’s words usually impact markets in the first round of questions.
EUR/USD short-term technical outlook
The daily chart for the EUR/USD pair shows it posted modest losses for a third consecutive day, yet the downside remains well-limited. The pair trades above all its moving averages, with the shorter one gaining upward traction just below the 100 Simple Moving Average (SMA). The 200 SMA, in the meantime, extended its advance, currently standing at around 1.0550. Finally, technical indicators remain well into positive territory, with uneven directional strength, although far from suggesting bullish exhaustion.
In the near term, and according to the 4-hour chart, the risk skews to the downside. EUR/USD develops below a still bullish 20 SMA, while the longer ones remain far below the current level. The Momentum indicator heads firmly south within negative levels, while the Relative Strength Index (RSI) indicator also heads lower but is currently at around 54, somehow indicating reluctant selling interest.
Support levels: 1.0890 1.0850 1.0810
Resistance levels: 1.0945 1.0995 1.1040
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
NZD/USD trims gains to near 0.5850 after RBNZ Orr's press conference
NZD/USD has trimmed gains to reverse near 0.5850 early Wednesday. The New Zealand Dollar found fresh buyers after the RBNZ announced 50 bps interest rate cut to 4.25%, as widely expecteed but RBNZ Governor Orr's prudent remarks check the pair's upside.
USD/JPY stays pressured below 153.00, US data eyed
USD/JPY declines to over a two-week low below 153.00 early Wednesday as Trump's tariff threats continue to drive haven flows into the Japanese Yen. However, doubts over the BoJ's ability to tighten its monetary policy further should cap the USD/JPY downside ahead of US data.
Gold price looks to extend recovery toward $2,650
Gold price has found fresh demand, looking to extend the previous rebound toward $2,650 in Wednesday's Asian trading. The ongoing US Dollar weakness and sluggish US Treasury bond yields allow Gold price to gain traction amid a cautiously optimistic market mood. US data awaited for fresh impetus.
Ripple's XRP sees decline as realized profits reach record levels
Ripple's XRP is down 6% on Tuesday following record profit-taking among investors as its percentage of total supply in profit reached very high levels in the past week.
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.