- EUR/USD has been benefiting from Fed Powell's dovish comments.
- Virus and fiscal concerns in Europe and profit-taking on Wall Street may trigger a setback.
- Friday's four-hour chart is showing that the currency pair is still near overbought conditions.
"We are not really looking at forecasts for this purpose, we are looking at actual progress" – Jerome Powell, Chair of the Federal Reserve, has reiterated the bank's commitment to act only when the economy fully recovers. For the dollar, that has meant additional pressure, allowing EUR/USD to hold onto its high ground.
Can this uptrend continue? While the world's most powerful central bank is focused on outcomes, not outlooks, and continues printing greenback, Powell's messages were not new. On Friday, investors already have a somewhat different view – the recovery in US Treasury yields have edged higher, underpinning the greenback and pushing EUR/USD under 1.19.
Another factor somewhat pressuring the greenback is the disappointing increase of American jobless claims to 744,000, holding above 700,000 for the second consecutive week.
However, EUR/USD bears may have more to chew on in Europe. Isabel Schnabel of the European Central Bank warned that delaying EU fiscal aid would be a "catastrophe." She shed light on issues with distributing the already agreed New Generation funds.
America's fiscal support has been far more robust and has been flowing rapidly in the past year. President Joe Biden is currently focused on gun issues, but his team continues pushing for the next splurge – the $2.25 trillion infrastructure plan.
The old continent's more significant issues come from covid. Cases remain elevated in Germany, France, and Italy, with Spain joining in with fresh post-Easter increases. Moreover, several EU countries have banned the usage of AstraZeneca's vaccines for most adults, potentially delaying immunization rollout.
With a relatively light calendar, a refocus on the fundamentals may push the currency pair lower.
EUR/USD Technical Analysis
Euro/dollar remains in a short-term uptrend, setting higher highs and higher lows as shown on the four-hour chart. Momentum remains to the upside and the world's most popular currency pair is holding above the 100 and 200 Simple Moving Averages. However, EUR/USD has failed to top the 200 SMA and the Relative Strength Index is still too close to 70 – near overbought conditions.
Some support awaits at 1.1890, the daily low, followed by 1.1860, which cushioned the pair on Thursday. It is followed by 1.1825, where the 100 SMA hits the price.
Resistance is at the April peak of 1.1925, followed by 1.1950 and 1.1990, the latter being a double top.
Bank to the Future: Interest rates return to market center stage
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
AUD/USD: The hunt for the 0.7000 hurdle
AUD/USD quickly left behind Wednesday’s strong pullback and rose markedly past the 0.6900 barrier on Thursday, boosted by news of fresh stimulus in China as well as renewed weakness in the US Dollar.
EUR/USD refocuses its attention to 1.1200 and above
Rising appetite for the risk-associated assets, the offered stance in the Greenback and Chinese stimulus all contributed to the resurgence of the upside momentum in EUR/USD, which managed to retest the 1.1190 zone on Thursday.
Gold holding at higher ground at around $2,670
Gold breaks to new high of $2,673 on Thursday. Falling interest rates globally, intensifying geopolitical conflicts and heightened Fed easing bets are the main factors.
Bitcoin displays bullish signals amid supportive macroeconomic developments and growing institutional demand
Bitcoin (BTC) trades slightly up, around $64,000 on Thursday, following a rejection from the upper consolidation level of $64,700 the previous day. BTC’s price has been consolidating between $62,000 and $64,700 for the past week.
RBA widely expected to keep key interest rate unchanged amid persisting price pressures
The Reserve Bank of Australia is likely to continue bucking the trend adopted by major central banks of the dovish policy pivot, opting to maintain the policy for the seventh consecutive meeting on Tuesday.
Five best Forex brokers in 2024
VERIFIED Choosing the best Forex broker in 2024 requires careful consideration of certain essential factors. With the wide array of options available, it is crucial to find a broker that aligns with your trading style, experience level, and financial goals.