- Bounces on fresh DXY selling.
- Back above 50-DMA barriers at 1.1750.
- Eurozone final CPI, US tax reforms in focus.
Fresh bids emerged for the EUR/USD pair near 1.1740 levels in early trades, which prompted a bounce back above the 50-DMA support-turned-resistance at 1.1750, as the bulls fight back control kicking-off a brand new week.
EUR/USD: Will it sustain the bounce?
Amidst broad-based US dollar weakness ahead of the US tax reform votes, the main currency pair caught a fresh bid and paused its two consecutive days of declines, now making headways towards the 1.18 handle ahead of the Eurozone final CPI figures due later in the European session. The Eurozone final CPI is expected to confirm a 1.5% reading, the seen in the prelim release.
The Euro also continues to derive some support from the upward revisions made to its growth projections by the ECB last week, while solid Eurozone fundamentals, including a raft of solid manufacturing PMI reports, also helps underpin the sentiment around the spot.
More so, Friday’s US CFTC commitment of traders’ report that showed the EUR net longs increased to the highest levels since May 2007, also lifts the sentiment around the common currency so far this session. The EUR longs increased in the current week to 114K - a change of 21k.
Looking ahead, it remains to be seen whether the major can sustain the latest upmove, in the wake of the US political developments surrounding the tax reforms and ahead of the key US macro news, including the final GDP and durable goods data.
EUR/USD Technical Outlook
Valeria Bednarik, Chief Analyst at FXStreet, explains: “Shorter term, and according to the 4 hours chart, the risk has also turned toward the downside, as the pair settled below all of its moving averages, while the Momentum indicator entered bearish territory as the RSI indicator heads south around 42. The pair has a major support around 1.1715, where it bottomed twice in the last four weeks. Support levels: 1.1715 1.1660 1.1620. Resistance levels: 1.1770 1.1830 1.1870.”
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 stays in positive territory above 1.0850 after US data
EUR/USD clings to modest daily gains above 1.0850 in the second half of the day on Friday. The improving risk mood makes it difficult for the US Dollar to hold its ground after PCE inflation data, helping the pair edge higher ahead of the weekend.
GBP/USD stabilizes above 1.2850 as risk mood improves
GBP/USD maintains recovery momentum and fluctuates above 1.2850 in the American session on Friday. The positive shift seen in risk mood doesn't allow the US Dollar to preserve its strength and supports the pair.
Gold rebounds above $2,380 as US yields stretch lower
Following a quiet European session, Gold gathers bullish momentum and trades decisively higher on the day above $2,380. The benchmark 10-year US Treasury bond yield loses more than 1% on the day after US PCE inflation data, fuelling XAU/USD's upside.
Avalanche price sets for a rally following retest of key support level
Avalanche (AVAX) price bounced off the $26.34 support level to trade at $27.95 as of Friday. Growing on-chain development activity indicates a potential bullish move in the coming days.
The election, Trump's Dollar policy, and the future of the Yen
After an assassination attempt on former President Donald Trump and drop out of President Biden, Kamala Harris has been endorsed as the Democratic candidate to compete against Trump in the upcoming November US presidential election.