EUR/USD crosses over 50-day SMA: will 1.094 be retested?
The EUR/USD pair has crossed over the 50-day simple moving average (SMA) at the 1.074 level, following preliminary data showing Germany's overall inflation rising 7.9% year-on-year in May, reaching its highest level since winter 1973 and above expectations of 7.6%.
German inflation has sparked speculations about a 50 basis point increase in ECB interest rates, bolstering the single currency. The Euribor futures market is now fully pricing in 50-basis-point hike by July, FFEU3N2022.
Meanwhile, US economic prints –
EXHOSLUSM495Shousing data , USGDPQQfirst quarter GDP, and the UMCSENTMichigan consumer sentiment index – fell short of forecasts last week, tempering Fed tightening expectations and weighing on the USD.
Technically, the EUR/USD pair is recovering from the bullish divergence in mid-May, when prices established new lows but momentum oscillators (daily RSI) did not.
On the upside, bulls see 1.094 as the next major resistance level, where they will face severe selling pressure from bears because the level has not been breached since April 6. On the downside, 1.064 may be a level of support for buyers looking to re-enter the short-term rally.
German inflation has sparked speculations about a 50 basis point increase in ECB interest rates, bolstering the single currency. The Euribor futures market is now fully pricing in 50-basis-point hike by July, FFEU3N2022.
Meanwhile, US economic prints –
EXHOSLUSM495Shousing data , USGDPQQfirst quarter GDP, and the UMCSENTMichigan consumer sentiment index – fell short of forecasts last week, tempering Fed tightening expectations and weighing on the USD.Technically, the EUR/USD pair is recovering from the bullish divergence in mid-May, when prices established new lows but momentum oscillators (daily RSI) did not.
On the upside, bulls see 1.094 as the next major resistance level, where they will face severe selling pressure from bears because the level has not been breached since April 6. On the downside, 1.064 may be a level of support for buyers looking to re-enter the short-term rally.
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