EURUSD: just a short reversal
It was an important week for USD as Fed Chair Powell was speaking in front of the US Senate, answering various questions regarding the state of the US economy. Some of the major points stressed were that the inflation has slowed down, but it continues to be persistent. In this sense, there should be expected additional rate hikes as of the end of this year. The job market is still resilient to the monetary measures, which is positive, however, in the coming period it should be expected a slow down in the US economy, which would be a part of efforts to bring the inflation levels back to 2% target. Important data published during the previous week for the US were building permits, which were 1.491M in May, and increased from 1.417M from the month before. There has not been significant data published for the Euro Area during the previous week, except data for the current account, which dropped from Eur 45B in March to Eur 4.2B in April. This is another reflection of a recession in the EU, which shows that its balance of trade is shrinking.
Technical analysis from two weeks ago was clearly pointing to a short term pivotal point for the eurusd currency pair. After reaching level of 1.100, the pair reverted to the downside, where USD was gaining against Euro, especially during the FED Chair Powell`s testimony to the Senate. Lowest level reached during the week was on Friday at 1.085. RSI reached level of 64, but is ending the week around 53. This is indication that the market is still not ready to give up on a buying side. Moving averages of 50 and 200 days continue to move as two parallel lines, still not indicating that potential cross might occur in the coming period.
The market is clearly indicating that it is still not ready for a move further to the downside. In this sense, there is high probability that eurusd will test 1.08 support line, but there is no indication that the pair will break it on this occasion. The currency pair would rather revert a bit to the upside, at least to the levels above 1.09 to test it for one more time.
Important news to watch during the week ahead are:
Euro: ECB Forum on Central Banking, Ifo Business Climate for Germany, ECB President Lagarde Speech as of June 26th and 27th, GfK Consumer Confidence for Germany, Inflation rate for June for Germany, Unemployment Change for June for Germany, Inflation Rate for June
USD: Durable Goods Orders for May, CB Consumer Confidence, Fed Chair Powell Speech, GDP Growth Rate for Q1, PCE Price Index for May, Michigan Consumer Sentiment for June
Technical analysis from two weeks ago was clearly pointing to a short term pivotal point for the eurusd currency pair. After reaching level of 1.100, the pair reverted to the downside, where USD was gaining against Euro, especially during the FED Chair Powell`s testimony to the Senate. Lowest level reached during the week was on Friday at 1.085. RSI reached level of 64, but is ending the week around 53. This is indication that the market is still not ready to give up on a buying side. Moving averages of 50 and 200 days continue to move as two parallel lines, still not indicating that potential cross might occur in the coming period.
The market is clearly indicating that it is still not ready for a move further to the downside. In this sense, there is high probability that eurusd will test 1.08 support line, but there is no indication that the pair will break it on this occasion. The currency pair would rather revert a bit to the upside, at least to the levels above 1.09 to test it for one more time.
Important news to watch during the week ahead are:
Euro: ECB Forum on Central Banking, Ifo Business Climate for Germany, ECB President Lagarde Speech as of June 26th and 27th, GfK Consumer Confidence for Germany, Inflation rate for June for Germany, Unemployment Change for June for Germany, Inflation Rate for June
USD: Durable Goods Orders for May, CB Consumer Confidence, Fed Chair Powell Speech, GDP Growth Rate for Q1, PCE Price Index for May, Michigan Consumer Sentiment for June
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