EUR/USD Forecast: US Dollar soars as markets turn risk-averse

Valeria Bednarik FXStreet

EUR/USD Current price: 1.0685

The US Q1 Gross Domestic Product missed expectations, triggering risk aversion.
The yield on the 2-year Treasury note surged beyond 5.0%.
EUR/USD is on its way to retesting the year low at 1.0600.

The EUR/USD pair surged to 1.0729 during European trading hours, retaining gains and developing above the 1.0700 threshold ahead of the critical United States (US) Gross Domestic Product (GDP) report. Ahead of Wall Street’s opening, the Bureau of Economic Analysis (BEA) reported the economy grew at an annualized pace of 1.6% in the three months to March, missing the 2.5% expected and well below the previous 3.4%. Furthermore, consumer prices increased 3.4%, well above the prior quarter’s 1.8% advance.

As a result, financial markets entered risk-aversion mode. The US Dollar surged as Wall Street plunged, while government bond yields soared. The 2-year Treasury note yields 5.02%, and the USD runs alongside. Inflation concerns are back on the table, and that could delay the Federal Reserve’s decision to go for rate cuts despite tepid growth. Bad news all over the place.

EUR/USD short-term technical outlook

The EUR/USD pair trades around 1.0690 and keeps pressuring intraday lows, in line with another leg south. The daily chart shows the pair met sellers around a mildly bearish 20 Simple Moving Average (SMA), which maintains its firmly bearish slope below the longer ones. At the same time, technical indicators head lower below their midlines, with moderated strength, but still suggesting bears are in control.

In the near term, and according to the 4-hour chart, the pair trades between moving averages. A bearish 100 SMA caps advances, while a mildly bullish 20 SMA acts as support. At the same time, technical indicators have turned lower and are currently pressuring their midlines from above, just shy of confirming a bearish extension. Once below the next support level at 1.0645, the pair will be on its way to pierce the 1.0600 threshold.

Support levels: 1.0645 1.0600 1.0570

Resistance levels: 1.0700 1.0740 1.0785

Premium

You have reached your limit of 3 free articles for this month.

Start your subscription and get access to all our original articles.

Subscribe to Premium Sign In

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 flat lines around 1.1900; looks to US NFP report for fresh directional impetus

The EUR/USD pair is seen oscillating in a narrow trading band around the 1.1900 mark during the Asian session on Wednesday as traders opt to wait for the release of US monthly employment details before placing fresh directional bets.

GBP/USD slips back to daily lows near 1.3640

GBP/USD drops to daily lows near 1.3640 as sellers push harder and the Greenback extends its rebound in the latter part of Tuesday’s session. Looking ahead, the combination of key US releases, including NFP and CPI, alongside important UK data, should keep the pound firmly in focus over the coming days.

Gold awaits US Nonfarm Payrolls data for a sustained upside

Gold remains capped below $5,100 early Wednesday, gathering pace for the US labor data. The US Dollar licks its wounds amid persistent Japanese Yen strength and potential downside risks to the US jobs report. Gold holds above $5,000 amid bullish daily RSI, with eyes on 61.8% Fibo resistance at $5,141.

Ethereum: Whales buy the dip amid rising short bets

Following one of Ethereum's largest weekly drawdowns, whales are slowly returning to action alongside a drop in retail selling pressure. After slightly selling into the decline at the start of the month, whales or wallets with a balance of 10K-100K ETH began buying the dip last Wednesday as prices crashed further.

Dollar drops and stocks rally: The week of reckoning for US economic data

Following a sizeable move lower in US technology Stocks last week, we have witnessed a meaningful recovery unfold. The USD Index is in a concerning position; the monthly price continues to hold the south channel support.

XRP holds $1.40 amid ETF inflows and stable derivatives market

Ripple trades under pressure, with immediate support at $1.40 holding at the time of writing on Tuesday. A recovery attempt from last week’s sell-off to $1.12 stalled at $1.54 on Friday, leading to limited price action between the current support and the resistance.