Eurozone Enjoys Ascension Day Holiday
The EUR/USD fell on Wednesday amid the rising prices of the U.S. Dollar and the U.S. Treasury yields after the release of U.S. inflation data on the day. In April, the strong inflation report added strength in the U.S. treasury yields on rising hopes that Fed will raise interest rates given increased prices.
The U.S. Dollar Index (DXY) that measures the greenback's value against the basket of six major currencies jumped on Wednesday and reached $90.79. At the same time, the U.S. Treasury yield on benchmark 10-year note rose for the 5th consecutive session and reached 1.695%. The rising yields and dollar prices kept the currency pair EUR/USD under pressure for the day. The EUR/USD pair remained under pressure as the data from the European Union also remained against the single currency Euro on Wednesday after CPI from France and Industrial production from the whole bloc came in short of expectations.
On the data front, at 11:00 GMT, the German Final CPI remained flat at 0.7%. At 11:45 GMT, French Final CPI for April declined to 0.1% against the forecasted 0.2% and weighed on the single currency Euro and added further EUR/USD pair losses. At 14:00 GMT, the Industrial Production in March reduced to 0.1% from the expected 0.8% and weighed on Euro and dragged EUR/USD pair further lower. From the U.S. side, at 17:30 GMT, the Consumer Price Index in April surged to 0.8% from the projections of 0.2% and supported the U.S. dollar and added further losses in EUR/USD pair. In April, the Core CPI also rose to 0.9% from the estimated 0.3%, supported the U.S. dollar, and dragged EUR/USD pair even lower.
Meanwhile, the world's biggest holiday group, TUI Group, said on Wednesday that Europe's summer holiday season could be saved. TUI group expects a strong 2021 summer season as the last-minute bookings increased due to the rising level of vaccinations. The company will operate 75% of pre-pandemic capacity after getting hit hard during the last six months. The world's biggest holiday group reported a 1.3 billion euro loss for the six months ended in March and said that the worst had left behind as European resorts have started to open. This news kept the losses in EUR/USD pair limited for the day as it supported the single currency Euro.
Furthermore, the currency pair EUR/USD was also declining on Wednesday as the risk-off market sentiment emerged in the market after the fears of war between Israel and Palestine escalated. The United Nations feared a full-scale war after Israel militants and the military of Palestine at Gaza strip had a deadly exchange of fires on Wednesday. Israel carried out hundreds of airstrikes on Gaza, destroyed three tower blocks, and killed senior Hamas officials. In retaliation to this, more than 1000 rockets were fired by Palestinian militants into Israel. The UN was alarmed that the rising tensions between both countries might start a full-scale war which raised the risk-off market sentiment and dragged the riskier assets like EUR/USD.
EURUSD Intraday Technical Levels
Support Resistance
1.2118 1.2178
1.2091 1.2209
1.2059 1.2237
Pivot Point: 1.2150
EUR/USD - Technical Outlook
The EUR/USD fell dramatically from 1.2126 to 1.2073 level. Currently, the pair is gaining immediate support at the 1.2067 level, and violation of this level exposes the EUR/USD level until the next support area of 1.1992 level. On the 4-hour chart, an upward trendline supports the EUR/USD pair at 1.2067, and below this, the EUR/USD will come under selling pressure. However, holding of EUR/USD over 1.2064 level is keeping the pair bullish. On the 4-hour chart, the EUR/USD pair has closed a bearish engulfing candle which is also adding selling pressure on the pair. The EUR/USD immediate resistance holds at 1.2130 and 1.2175 along with support around 1.2064 and 1.1992. All the best!
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