ECB President Lagarde Speech Ahead!
The EUR/USD closed at $1.1860 after placing a high of $1.1926 and a low of $1.1846. EUR/USD dropped to its lowest level since April 6 after continuously declining for three consecutive days. The strength in the U.S. dollar caused the steep fall in EUR/USD currency pair amid the latest hawkish comments from the Federal Reserve. The U.S. dollar edged higher in early European trade Friday. It continued to benefit from the surprise move by the Federal Reserve as it brought forward the timetable for raising interest rates. The U.S. Dollar Index, which tracks the greenback against the basket of six major currencies, traded at 91.93 after hitting a more than 2-month high level above 92. The rising greenback prices added to pressure on the currency pair EUR/USD and dragged it downwards.
On the data front, there was no macroeconomic data to be released from the U.S. side. Still, from the European side, the German PPI for April rose to 1.5% against the forecasted 0.7% and supported a single currency Euro that capped further loss in the EUR/USD pair. Furthermore, at 13:00 GMT, the Current Account Balance rose to 22.8B against the predicted 20.3B and supported the single currency Euro that limited the decline in EUR/USD pair.
The U.S. dollar was onboard solid after the Federal Reserve showed a willingness to raise interest rates by the end of 2023 at least two times from the current level of 0.25% to 0.6%. Some officials from the Fed also expressed plans to start tapering stimulus measures, and for that purpose, they said that the Fed would keep a close eye on the economic data. The Fed Chairman Jerome Powell also noted that FOMC members were discussing reducing the $120 billion a month in asset purchases amid the progress due to immunization campaigns. However, he also said that the economy's path would continue to depend on the pandemic developments and warned that economic projections should be taken with a big grain of salt.
On the other hand, last week, the European Central bank noted that the GOverning COuncil decided to confirm its very accommodative monetary policy stance despite rising inflation and improving economic conditions. On Friday, ECB member Jens Weidmann said that the central bank's PEPP program should end soon as he was foreseeing the monetary policy to come back to normal in 2022.
The U.S. dollar was gaining strength amid the imbalance between central banks and the faster immunization campaigns and subsequent reopening of the economy. However, the EU has also started reopening and moving towards speeding up its economic growth. On Friday, the European Union officially lifted travel restrictions for the residents of the United States.
EURUSD Intraday Technical Levels
Support Resistance
1.1858 1.1881
1.1844 1.1890
1.1835 1.1904
Pivot Point: 1.1867
**
EUR/USD - Technical Outlook**
The EUR/USD pair fell dramatically from 1.2091 level to trade at 1.1848 level. On the 4 hour timeframe, the EUR/USD pair is stuck in between a narrow trading range of 1.1889 – 1.1848 level. On the 4 hour timeframe, the EUR/USD is staying far away from 50 periods EMA that's extending resistance at 1.2070 level. The MACD indicator supports a strong selling bias. However, the EMA is far away from the current market price level of 1.1875. This demonstrates the oversold situation of the EUR/USD pair. A bullish breakout of 1.1889 level can expose the pair towards 1.1975 and 1.2010 levels. All the best!
JOIN LONGHORNFX TODAY
24/7 live support, lightning fast withdrawals, guaranteed safe and reliable trading platforms with a true ECN broker.