EUR/USD: Room for a slide toward the 1.0330 area – MUFG

Matías Salord FXStreet

The EUR/USD is about to post the lowest weekly close in two months. According to analysts at MUFG Bank, the US Dollar has room to rise further versus the Euro, potentially toward the 200-day Moving Average, currently around 1.0330.

Room for USD rebound to extend further

“The pair has broken back below the 1.06000-level over the past week and we expect it to fall back towards support from the 200-day moving average that comes in at around 1.0330.”

“The recent move lower in EUR/USD has been mainly driven by the USD leg. Stronger US activity data combined with firmer inflation at the start of this year is encouraging market participants to price in a more hawkish outlook for Fed policy.”

“While euro-zone activity data it still surprising to the upside on balance, the scale of upside surprise is beginning to diminish. The EUR failed to strengthen on the back of the stronger PMI surveys over the past week, and there was a downward revision to German GDP in Q4 revealing a larger contraction.”

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

EUR/USD looks weak below 1.1800

EUR/USD has slipped back under pressure, breaking through the 1.1800 support and drifting towards the weekly lows near 1.1770 ahead of the opening bell in Asia. The move reflects renewed strength in the US Dollar, with steady geopolitical tensions keeping its demand firm. Moving forward, the release of the German labour market report and flash inflation figures should keep European investors entertained on Friday.

GBP/USD threatens the 200-day SMA near 1.3440

GBP/USD rapidly leaves behind Wednesday’s strong advance, coming under heavy pressure and retesting the 1.3440 zone, where the critical 200-day SMA is located. Cable’s deep pullback follows the strong gains in the Greenback, while investors continue to pencil in a potential BoE rate cut in March.

Gold trims gains, slips back to around $5,170

Gold is now facing some downside pressure, hovering around the $5,170 region on Thursday. The yellow metal surrenders part of its earlier gains on the back of the resurgence of the buying interest in the Greenback. In the meantime, geopolitical tensions in the Middle East continue to limit the downside potential for now.