EUR/USD - Top in Place after Trump's Davos speech?

EUR creates bearish pinbar after Trump's "strong dollar" comment.
Focus on US data - GDP and durable goods orders.

Omkar Godbole FXStreet Contributor

EUR/USD formed a bearish pinbar candle yesterday as Trump's strong dollar comment gave a much-needed boost to the greenback. The currency pair fell to 1.2364 in late NY session before rising to 1.2430 levels in Asia.

The bearish pinbar if followed by a negative price action today would add credence to the overbought conditions as shown by the RSI and indicate a short-term top is in place at 1.2538.

That said, only a strong US GDP and the durable goods figure could yield a negative follow-through to yesterday's bearish pinbar candle. This is because Trump's pro-USD comments have already been shrugged off by Asian desks (as indicated by a rise in EUR/USD in Asia).

Further, ECB President Draghi's focus on GDP and relatively mild emphasis on the strong EUR is being read by investors as a sign the central bank is comfortable with the EUR's ascent. Hence, only a strong US Q4 and Dec durable goods orders figure could weigh over the EUR/USD pair.

Kathy Lien from BK Asset Management writes, " We are looking for (US) growth to slow as trade and retail sales activity weakened towards the end of the year." EUR/USD could revisit previous day's high of 1.2538 if the US data shows a sharp slowdown in the economic activity.

EUR/USD Technical Levels

As of writing, the spot is trading at 1.2425 levels. A move above 1.2432 (monthly 200-MA) could see the pair test supply around 1.25 (zero levels) and 1.2538 (previous day's high). On the other hand, a break below 1.2399 (1-hour 50-MA) could yield a pullback to 1.2329 (1-hour 100-MA) and 1.2284 (1-hour 200-MA)

	TREND INDEX	OB/OS INDEX	VOLATILY INDEX
15M	Bearish	Overbought	Shrinking
1H	Bearish	Neutral	High
4H	Bullish	Neutral	High
1D	Bullish	Neutral	High
1W	Bullish	Overbought	Expanding
Updated Jan 26, 03:45 GMT

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

EUR/USD accelerates losses, focus is on 1.1800

EUR/USD’s selling pressure is gathering pace now, opening the door to a potential test of the key 1.1800 region sooner rather than later. The pair’s pullback comes on the back of marked gains in the US Dollar following US data releases and the publication of the FOMC Minutes later in the day.

GBP/USD turns negative near 1.3540

GBP/USD reverses its initial upside momentum and is now adding to previous declines, revisiting at the same time the 1.3540 region on Wednesday. Cable’s downtick comes on the back of decent gains in the Greenback and easing UK inflation figures, which seem to have reinforced the case for a BoE rate cut in March.

Gold reclaims $5,000 and above

Gold is back on the front foot on Wednesday, shaking off part of the early week softness and challenging two-day highs just above the key $5,000 mark per troy ounce. The move comes ahead of the FOMC Minutes and is unfolding despite an intense rebound in the US Dollar.

Fed Minutes to shed light on January hold decision amid hawkish rate outlook

The Minutes of the Fed’s January 27-28 monetary policy meeting will be published today. Details of discussions on the decision to leave the policy rate unchanged will be scrutinized by investors.

Mixed UK inflation data no gamechanger for the Bank of England

Food inflation plunged in January, but service sector price pressure is proving stickier. We continue to expect Bank of England rate cuts in March and June. The latest UK inflation read is a mixed bag for the Bank of England, but we doubt it drastically changes the odds of a March rate cut.

Sui extends sideways action ahead of Grayscale’s GSUI ETF launch

Sui is extending its downtrend for the second consecutive day, trading at 0.95 at the time of writing on Wednesday. The Layer-1 token is down over 16% in February and approximately 34% from the start of the year, aligning with the overall bearish sentiment across the crypto market.