EURUSD has broke back of interests for the week
Updated
Earlier this week, ECB President Christine Lagarde expressed confidence in the euro zone inflation being under control. In contrast, the recently released Fed minutes indicate a negative impact on the committee's confidence in achieving 2% inflation and suggest that it will take more time to recover. The minutes were recorded before the latest US CPI data, highlighting that a single positive print is not enough for the Fed to consider interest rate cuts seriously.
EURUSD was expected to give up last week's gains as the FX market focused on higher yielding currencies like the US dollar, Pound Sterling, and the Kiwi dollar. Despite breaking out of an ascending channel, EURUSD traded slightly higher in the London AM session following improved European flash PMI data for May. German manufacturing data showed signs of improvement, moving closer to the neutral 50 mark, and there was a slight increase in sentiment in the services sector as well.
Channel support, now resistance, serves as the nearest challenge to dollar strength heading into the end of the week. 1.0800 and the 200-day simple moving average (SMA) present downside levels of interest.
EURUSD was expected to give up last week's gains as the FX market focused on higher yielding currencies like the US dollar, Pound Sterling, and the Kiwi dollar. Despite breaking out of an ascending channel, EURUSD traded slightly higher in the London AM session following improved European flash PMI data for May. German manufacturing data showed signs of improvement, moving closer to the neutral 50 mark, and there was a slight increase in sentiment in the services sector as well.
Channel support, now resistance, serves as the nearest challenge to dollar strength heading into the end of the week. 1.0800 and the 200-day simple moving average (SMA) present downside levels of interest.
Note
On the daily time frame, EURUSD reversed below the 1.0880 resistance, coinciding with the upper border of the descending channel. If the price maintains its bearish momentum with a bearish break of the 1.0780 support, the price could fall further towards the 1.0650 support. Conversely, if the price breaks out of the descending channel and the 1.0880 resistance to the upside (bullish breakout), it could push the next potential resistance level at 1.1000 further. The RSI indicator is fluctuating near the overbought zone, suggesting that the potential for further price increases is limited.Note
Note
EUR/USD edged up slightly during Tuesday's Asian session and is currently trading around 1.0770. Both fundamental and technical outlooks call for caution before looking at the previous day's mild recovery from lows around 1.0730.Note
EUR/USD needs to hold above 1.0800 to maintain the uptrend, if it falls below this level first support will appear around 1.0740, on the way towards 1.0660. A deeper decline would push the pair towards the year's low at 1.0600 if the USD regains its footing.
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