EUR/USD Price Analysis – April 26, 2023
Daily Price Outlook
The EUR/USD pair has risen by nearly 0.50% in 24 hours to 1.1010. The currency pair has increased, with ECB discussions and German consumer confidence in focus. Additionally, the weaker dollar has supported the rise.
Weaker Dollar Boosts EUR/USD
On Tuesday, First Republic Bank shares experienced a nearly 50% decline as the bank reported a drop of over $100 billion in deposits for Q1, due to decreasing consumer trust in the banking industry.
Additionally, statistics released overnight showed that US consumer confidence fell to a nine-month low in April, increasing the likelihood of a recession this year. The Consumer Confidence Index dropped from 104.0 in March to 101.3.
US economic indicators underperformed expectations, with data from the industrial sector revealing further weaknesses in the US economy. The US dollar fell against most major currencies as risk-off sentiment put pressure on US Treasury rates. DXY is down 0.20 percent at 101.66.
The US dollar stabilized as renewed concerns about the US banking industry and economy dampened risk appetite. The weaker dollar consequently contributed to the rise in the EUR/USD.
The cautious atmosphere ahead of today's release of the US Durable Goods Orders for March appears to be challenging recent US dollar bulls. The Federal Reserve is expected to announce an unchanged 25 bp decision in the first week of May.
Investors are keenly focused on Fed Chair Jerome Powell's upcoming guidance on interest rates, as the event is highly anticipated. The monthly US Durable Goods Orders report for March may provide clues about opinions on terminal rates.
Anticipation Builds for German GfK Consumer Climate
The day ahead for the EUR/USD is rather calm on the Euro front. Later in the day, the spotlight will be on data on German consumer sentiment. According to economists, the GfK German Consumer Climate Indicator is expected to increase from -29.5 to -27.9 in May.
The weaker-than-expected statistics would impact the EUR/USD. However, they are unlikely to influence the ECB's next interest rate decision, with core inflation being the focus.
The discussion among ECB members will change the dial as investors pay attention to inflation and central banks. Three members of the ECB Executive Board are scheduled to speak today: Andrea Enria, Luis de Guindos, and Anneli Tuominen.
Daily Technical Levels
Support Resistance
1.0934 1.1039
1.0897 1.1105
1.0830 1.1143
Pivot Point: 1.1001
EUR/USD – Technical Outlook
The EUR/USD pair is displaying a slightly bullish inclination following initial support found at the 1.0966 level. Based on the two-hourly time frame, the pair experienced a significant decline from 1.1059 to 1.0966. The RSI and MACD, both leading technical indicators, have entered the oversold zone, indicating that the selling bias is weakening.
As a result, it is possible that the EUR/USD pair may rebound from the immediate support level of 1.0966, with the closing of candles above this level likely to trigger a bullish retracement up to the 23.6% Fibonacci retracement level of 1.0998. If a bullish breakout occurs above the 1.0998 level, gains may extend up to the 38.2% Fibonacci retracement level of 1.1005.
Should there be an increase in demand for EUR/USD, it is possible that the pair may break through the 1.1006 level and extend the bullish trend until the 1.1030 level, which marks a 61.8% Fibonacci retracement level. The suggested approach is to seek a buy position above the 1.0966 support level in order to target either the 1.1006 or 1.1030 level.
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