EUR/USD Mid-Session Technical Analysis for May 29, 2020

The Euro is trading higher at the mid-session on Friday as traders await a key press conference from President on China in a move that could have a dramatic effect on investor sentiment.

On Friday, the greenback extended its slide against the surging Euro, hurt by month-end flows and as the common currency continued to enjoy a boost from the European Union’s recently announced plan to prop up the bloc’s coronavirus-hit economies with a 750 billion-Euro ($828 billion) recovery fund.

At 18:17 GMT, the EUR/USD is trading at 1.1093, up 0.0014 or -0.12%. This is down from an intraday high of $1.1145.

An early session gain by the Euro was driven by optimism generated by the European Commission’s stimulus plan announced earlier this week, as well as investors’ improved appetite for risk-taking as global economies gradually move to reopen after coronavirus-linked shutdowns, analysts said.

However, prices fell after the U.S. Dollar found support as traders awaited U.S. President Donald Trump’s response to China’s tightening control over Hong Kong, which could worsen tensions between the two powers over the financial hub.

Daily EUR/USD

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend continued earlier today when buyers took out yesterday’s high. A trade through the main top at 1.1147 will reaffirm the uptrend. The main trend will change to down on a trade through the last main bottom at 1.0871.

The main range is 1.1496 to 1.0636. The EUR/USD is currently testing its retracement zone at 1.1066 to 1.1167. This zone is controlling the longer-term direction of the Forex pair.

The short-term range is 1.0636 to 1.1147. Its retracement zone at 1.0987 to 1.0937 is the nearest support zone.

Daily Swing Chart Technical Forecast

Based on the early price action and current price at 1.1093, the direction of the EUR/USD the rest of the session on Friday is likely to be determined by trader reaction to the main 50% level at 1.1066.

Bullish Scenario

A sustained move over 1.1066 will indicate the presence of buyers. If this creates enough upside momentum then we could see a surge into the main top at 1.1147, followed by the main Fibonacci level at 1.1167.

Bearish Scenario

A sustained move under 1.1066 will signal the presence of sellers. This is a potential trigger point for an acceleration to the downside with the short-term retracement zone at 1.0987 to 1.0937 the next likely downside target zone.

For a look at all of today’s economic events, check out our economic calendar.

EUR/USD Weekly Price Forecast – The Euro Explodes to The Upside

The Euro market rallied against the US dollar on the majority of the week, reaching towards the 1.1150 level before pulling back a bit early on Friday. Quite frankly, we are facing a significant amount of resistance just above and this is a completely messy chart at the moment. Yes, it is an extraordinarily strong and bullish candlestick that we have seen this recently, where the Euro exploded straight up in the air and then got slammed right back down.

EUR/USD Video 01.06.20

A lot of what we are seeing is a reaction “unified bonds” that the European Union is selling. In other words, Germany is backstopping Greece. With that, it should lead to a stronger currency, but at the end of the day the economic figures do not pan out for a stronger Euro. It is because of this that I think we will continue to see a lot of volatility, and therefore do not trust this rally quite yet. Beyond that, it is important to think of this as an indicator, showing you Euro strength or weakness in general.

I will use this chart tell me what to trade as far as direction is concerned in any EUR pair, but not necessarily this one. As I stated in my daily analysis, this sets up for a great indicator with the EUR/CAD pair, especially if crude oil continues to fall. However, I will keep you up-to-date as to what I see but right now I think we are to see a widening volatility regiment in this market, and that of course makes for nothing but headaches.

For a look at all of today’s economic events, check out our economic calendar.

EUR/USD Price Forecast – Euro Continues to Press Higher

The Euro exploded to the upside it over the last 48 hours, as the market has reached towards the 1.1150 level. This is an area where we have seen selling previously, but a lot of this is due to the European Union offering bonds that are backed by the entirety of the EU instead of the single countries. This should be stronger, and therefore people like the idea of the future of the Euro much more than they did just a few weeks ago.

EUR/USD Video 01.06.20

It is a remarkable move, but when you look at the last couple of months, we have seen massive moves in one direction or another. In other words, even though it is obviously bullish over the last several days, it is still difficult to get long of the Euro at this point, because we have seen this movie before, and have seen it recently. With that in mind I am a bit skeptical, and quite frankly will trade the Euro against other currencies.

I will use this currency pair as a bit of an indicator as to what I am doing with the Euro gets other currency such as the Canadian dollar, the Japanese yen, British pound, and so on. Obviously, the Euro is very strong in the short term, so buying the Euro gets is other currencies makes quite a bit more sense due to the fact that there is a lot of concern about negative headlines, so with that in the back of her mind, it is a bit difficult to be short the US dollar when you can short other currency such as the Canadian dollar that would take more of a hit in those scenarios.

For a look at all of today’s economic events, check out our economic calendar.

EUR/USD Daily Forecast: Euro Continues Highers While Dollar Index Falls to 9-Week Low

EUR/USD is attempting to post a fifth straight day of gains and was last seen approaching highs not seen since the end of March as the dollar remains under pressure.

The currency pair is lifted by prospects of further easing in Europe while the dollar is falling on the back of strength in the stock markets.

It’s expected to be a busy day ahead with several risk events that stand to move the markets.

Trump announced late yesterday that he will be giving a press conference related to China on Friday. Equity markets and some of the risky currencies, such as the Australian and New Zealand dollars, pared some gains after the announcement yesterday.

Fed Chair Powell is scheduled to speak in early North American trading. It will be his last chance to communicate the Fed’s stance ahead of the typical blackout period ahead of the Fed meeting to take place on June 11.

Further, the latest US PCE price index data will be released in the US session which also stands to move the markets. Analysts expect the core component of the index to show a decline of 0.3% last month following a drop of 0.1% in the prior reading.

Lastly, the markets are susceptible to month-end adjustment which also stands to impact volatility today.

Earlier today, Europe reported consumer prices to have risen 0.1% since last year which was in line with expectations but down from a rise of 0.4% in the last reading.

Technical Analysis

EURUSD Daily Chart

While EUR/USD shows strong upward momentum and a clear near-term bullish trend, the risk events in the session ahead stand to cause volatile fluctuations.

The pair cleared above it’s 200-day moving average yesterday which sets a bullish tone and suggests dips should continue to be bought.

Resistance for the session ahead is seen at 1.1183 which is just above the late March high.

EUR/USD closed yesterday at 1.1075 resistance but is seen trading firmly above it in the early day. The level is seen as the support for the session ahead.

The single currency is the strongest among the majors in the early day and for the week thus far.

Bottom Line

  • Several risk events in the session ahead suggest it will be a volatile session for EUR/USD and the markets in general.
  • The pair is approaching resistance at 1.1183 which may prove to be a major hurdle for bulls.

For a look at all of today’s economic events, check out our economic calendar.

Economic Data to Take a Back Seat with Trump’s News Conference the Main Event

Earlier in the Day:

It was a relatively busy day on the economic calendar this morning. The Japanese Yen and Aussie Dollar were in action early in the day.

Away from the economic calendar, the markets responded to Trump’s announcement on Thursday of plans to unveil measures against China at the news conference later today.

Fiscal stimulus from Brussels and the easing of lockdown measures across the EU and the U.S had provided support to riskier assets ahead of today’s open.

Looking at the latest coronavirus numbers,

On Thursday, the number of new coronavirus cases rose by 112,124 to 5,900,627. On Wednesday, the number of new cases had risen by 110,221. The daily increase was higher than both Wednesday’s rise and 106,139 new cases from the previous Thursday.

France, Germany, Italy, and Spain reported 5,612 new cases on Thursday, which was up from 1,892 new cases on Wednesday. On the previous Thursday, 1,976 new cases had been reported.

From the U.S, the total number of cases rose by 22,413 to 1,768,216 on Thursday. On Wednesday, the total number of cases had risen by 20,392. On Thursday 21st May, a total of 28,089 new cases had been reported.

The uptick on Thursday will need to be monitored in the coming days. With the easing of lockdown measures now in the 4th week, it would be in the coming days that a 2nd wave would become evident…

For the Japanese Yen

Inflation was in focus in the early part of the day, along with industrial production and retail sales figures.

In May, the Ku-area of Tokyo saw inflationary pressures return, with core consumer prices rising by 0.20% In April, consumer prices had fallen by 0.10%, year-on-year.

According to the Ministry of Internal Affairs and Communication.

  • Rising prices for clothes & footwear (+1.7%), furniture & household utensils (+1.7%), and culture & recreation (+1.2%) supported the rise.
  • There were also increases in prices for medical care (+0.8%) and housing (+0.7%).
  • Prices for Education (-8.9%) and fuel, light, & water charges (-1.9%) pinned back inflationary pressures, however.
  • There were also declines in prices for transport & communication (-0.1%) and miscellaneous (-0.8%).

In April, industrial production slumped by 9.1%, based on prelim numbers, following a 3.7% decline in March. Economists had forecast a 5.1% slide.

According to the Ministry of Economy, Trade, and Industry,

Industries that mainly contributed to the decrease were:

  • Motor vehicles, iron, steel & non-ferrous metals, and transport equipment (excl. motor vehicles).

Industries that mainly contributed to the increase were:

  • Production machinery.

Forecasts for May were not much better, with the forecast for industrial production revised from -1.4% to -4.1%. For June, however, forecasts are for production to rise by 3.9%.

Retail sales also disappointed in April, with lockdown and social distancing measures weighing.

According to the Ministry of Economy, Trade, and Industry, retail sales tumbled by 13.7% in April, year-on-year, following a 4.7% slide in March. Economists had forecasts an 11.50% decline.

The Japanese Yen moved from ¥107.701 to ¥107.608 upon release of the figures. At the time of writing, the Japanese Yen was down by 0.22% to ¥107.41 against the U.S Dollar.

For the Aussie Dollar

Private sector credit stalled in April, following a 1.10% increase in March.

According to figures released by RBA,

  • Business credit rose by 0.1%, following a 3.1% rise in March.
  • Personal credit slid by 3.0%, following a 1.4% decline in March.
  • Housing credit rose by 0.2%, which was down from a 0.3% rise in March.

The Aussie Dollar moved from $0.66312 to $0.66315 upon release of the figures. At the time of writing, the Aussie Dollar was up by 0.08% at $0.6642.

Elsewhere

At the time of writing, the Kiwi Dollar was down by 0.11% to $0.6203.

The Day Ahead:

For the EUR

It’s a busy day ahead on the economic calendar. Key stats include French and German retail sales figures for April and the Eurozone prelim inflation numbers for May.

Prelim inflation figures for France and Italy and 2nd estimate GDP numbers for France are also due out.

We will expect the numbers to have a muted impact on the EUR, however. The EU’s recovery plan and the continued easing of lockdown measures remain positives.

While COVID-19 news and updates remain EUR positive, the markets will need to monitor the number of new cases. On Thursday, there was an uptick. If an upward trend begins, this could question member state plans to ease lockdown measures further.

From the early part of the day, it was risk aversion that pinned back the EUR as the markets await Trump’s news conference later today.

At the time of writing, the EUR was up by 0.07% to $1.1085.

For the Pound

It’s yet another quiet day ahead on the economic calendar. There are no material stats due out to provide the Pound with direction.

Through the day, expect market risk sentiment and any Brexit chatter to be key drivers.

At the time of writing, the Pound was up by 0.01% to $1.2322.

Across the Pond

It’s another busy day ahead on the U.S economic calendar. Economic data includes April inflation and personal spending figures and May consumer sentiment and Chicago PMI numbers.

Expect the May figures to have the greatest influence, with the markets likely to brush aside April numbers.

Outside of the numbers, FED Chair Powell is scheduled to speak. Any commentary on the U.S economy and monetary policy will garner plenty of attention.

The main event of the day, however, is Trump’s news conference. What does the U.S President have in store for China?

The Dollar Spot Index was up by 0.02% to 98.407 at the time of writing.

For the Loonie

It’s also a busy day on the economic calendar. Key stats include 1st quarter GDP numbers and April’s RMPI.

Expect the GDP figures to have some influence, though the markets are expecting some quite dire numbers. Anything better than forecast should be Loonie positive…

Crude oil prices and market risk sentiment will be the key driver on the day, however.

At the time of writing, the Loonie was down by 0.10% to C$1.3777 against the U.S Dollar.

For a look at all of today’s economic events, check out our economic calendar.

EUR/USD Mid-Session Technical Analysis for May 28, 2020

The Euro hit a fresh eight-week high on Thursday, bolstered by a 750 billion Euro European Union plan to prop up the bloc’s virus-hit economies. But it is facing headwinds as doubts about delivery the scheme crept in.

“It is probably too early to say that the rally in the Euro is the start of a major re-rating of European risk,” said Chris Turner, global head of markets at ING, in a note.

“The path to getting (the) recovery fund carved out of the long-term EU budget will be a bumpy one…thus it is hard to make the case that (the) Euro moves higher in a straight line from current levels.”

At 13:56 GMT, the EUR/USD is trading 1.1038, up 0.0030 or +0.27%.

In other news, first-time claims for U.S. unemployment benefits totaled 2.1 million last week, the lowest total since the coronavirus crisis began though indicative that a historically high number of Americans remain separated from their jobs. Economists were looking for a 2.05 million increase.

Daily EUR/USD

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed on Thursday when buyers out the May 1 top at 1.1018. The main trend will change to down on a move through the last swing bottom at 1.0871.

The main range is 1.1496 to 1.0636. Its retracement zone at 1.1066 to 1.1167 is the next upside target. Sellers could show up on a test of this zone.

The short-term retracement zone at 1.0987 to 1.0937 is the first support. The intermediate retracement zone at 1.0892 to 1.0831 is the second support.

Daily Swing Chart Technical Forecast

Based on the early price action and the current price at 1.1026, the direction of the EUR/USD the rest of the session on Thursday is likely to be determined by trader reaction to the short-term Fibonacci level at 1.0987.

Bullish Scenario

A sustained move over 1.0987 will indicate the presence of buyers. Now that the main tops at 1.1008 and 1.1018 are out of the way, the Forex pair has a clear shot at the 50% level at 1.1066. This is a potential trigger point for an acceleration into the main top at 1.1147 and the main Fibonacci level at 1.1167.

Bearish Scenario

The inability to overtake 1.1066 will be the first sign of selling pressure, but the bullish tone will be tarnished if 1.0987 fails as support. This could lead to a pullback into at least 1.0937.

For a look at all of today’s economic events, check out our economic calendar.

EUR/USD Price Forecast – Euro Continues to Press 200 Day EMA

The Euro broke higher during the trading session on Thursday, reaching towards the 200 day EMA. That of course is a major technical indicator, and of course it will attract a lot of attention. Quite frankly, it comes down to whether or not people are going to pay attention to the Federal Reserve trying to kill the greenback, or are they going to pay attention to the European Union taking on federalized debts. That of course makes people more willing to invest in the European Union when they know that Germany is going to backstop everybody, but it also shows a lot of the major underlying issues with the European Union.

EUR/USD Video 29.05.20

Quite frankly, I think we are at a major inflection point, and the question is whether or not the market can cleanly break above the 200 day EMA. The daily close for Thursday is going to be crucial, and quite frankly if it is above the 1.1050 level, it is likely that the Euro continues to go much higher. When you look at the monthly charts, there are a couple of hammers, but there is also a major neutral candlestick due to the noise from February. In other words, while it does look like we are trying to form some type of base, the reality is that the Euro is a complete mess right now, so it is exceedingly difficult to trade with any type of confidence. Either way, I think the one thing you can probably count on is a lot of noise in this pair, which is quite typical for the way it behaves.

For a look at all of today’s economic events, check out our economic calendar.

EUR/USD Daily Forecast – Euro is Teetering on The Edge of a Breakout

EUR/USD pushed sharply higher in early trading on Wednesday to trade at levels not seen since the beginning of April. The pair shows strong potential for further upside although it may be too soon to call it a breakout.

The exchange rate turned sharply higher last week when leaders from France and Germany initially discussed a further stimulus plan to help out the economies hit hardest by Covid-19.

There was some push back from the original proposal as some member states opposed the idea of providing grants as a form of a stimulus.

The European Union discussed a new package yesterday, worth as much as 750 billion euros, that will be distributed in the form of grants and loans. Italy and Spain are expected to be the main beneficiaries of the package, set to receive 81.8 billion euros and 77.3 billion euros respectively.

Approval is still required from all of the member states and ongoing developments stand to move the exchange rate.

Aside from stimulus talks, continued strength in risk assets has weighed on the dollar which has further boosted the EUR/USD pair. The S&P 500 rallied above its 200-day moving average yesterday and closed above the indicator for the first time since early March.

Technical Analysis

EURUSD Daily Chart

EUR/USD broke above resistance at 1.0992 yesterday and managed to close above the level which is an indication of strength.

At the same time, the pair faces a hurdle from the 200-day moving average, an indicator it has not traded above since late March.

For this reason, price action in the session ahead will be important. A bullish break above the moving average should confirm an upside breakout.

Similarly, the US dollar index (DXY) is trading at support near 99.00 which served to hold the pair higher in the middle of April and in early May.

If the pair can continue to press higher from here, the next level of resistance falls at 1.1075 while 1.1182 could be a potential upside target.

Bottom Line

  • EUR/USD is on the verge of a breakout but still faces resistance from the 200 DMA.
  • US GDP figures and weekly unemployment claims data will be released later today which could trigger a volatile reaction in the pair.

For a look at all of today’s economic events, check out our economic calendar.

U.S Weekly Jobless Claims to Put the Greenback in Focus as Geopolitical Risk Lingers

Earlier in the Day:

It was a relatively busy day on the economic calendar this morning. The Aussie Dollar and Kiwi Dollar were in action once more.

Away from the economic calendar, the markets also responded to the moves across the EU and the U.S from Wednesday.

Fiscal stimulus from Brussels and the U.S government’s moves to further reopen the economy provided both support for riskier assets early on. Market sentiment overshadowed economic data that remained weak while improving …

For the commodity currencies, however, concerns over rising tensions between the U.S and China did pin back any breakouts.

Looking at the latest coronavirus numbers,

On Wednesday, the number of new coronavirus cases rose by 110,221 to 5,788,503. On Tuesday, the number of new cases had risen by 95,878. The daily increase was higher than both Tuesday’s rise and 89,941 new cases from the previous Wednesday.

France, Germany, Italy, and Spain reported 1,892 new cases on Wednesday, which was up from 1,535 new cases on Tuesday. On the previous Wednesday, 3,225 new cases had been reported.

From the U.S, the total number of cases rose by 20,392 to 1,745,803 on Wednesday. On Tuesday, the total number of cases had risen by 19,185. On Wednesday 20th May, a total of 21,774 new cases had been reported.

For the Kiwi Dollar

Business Confidence improved in May, with the ANZ Business Confidence Index rising from an April -66 to a finalized -41.8. May’s prelim had come in at -46.

According to the latest ANZ Report,

  • A net 39% of firms expect weaker economic activity in their own business, with the retail sector the most pessimistic once more.
  • Employment intentions rose from a net 50.8% of firms intending to reduce employment to a net 42%.
  • Investment intentions improved marginally from a negative 45% to a negative 32%.
  • Profit expectations rose from a net 70.4% expecting lower profitability to a net 56%. The agricultural sector remained the weakest at -71%, with the construction sector the least negative at -42%.
  • Export intentions rose by just 6 points to -36.

The Kiwi Dollar moved from $0.61897 to $0.61840 upon release of the numbers. At the time of writing, the Kiwi Dollar was up by 0.05% to $0.6185.

For the Aussie Dollar

1st quarter private new capital expenditure fell by 1.6%, quarter-on-quarter, following a 2.8% fall in the 4th quarter. Economists had forecast a 2.6% decline.

According to the ABS,

  • While investments in building and structures fell by 1.1%, investments in equipment, plant, and machinery slid by 2.3%.
  • Year-on-year, total New CAPEX slid by 6.1%.
  • Investments in building and structures tumbled by 7.9%, with investments in equipment, plant, and machinery falling by 4.0%.

The Aussie Dollar moved from $0.66222 to $0.66282 upon release of the figures. At the time of writing, the Aussie Dollar flat at $0.6622.

Elsewhere

At the time of writing, the Japanese Yen was down by 0.13% to ¥107.86 against the U.S Dollar.

The Day Ahead:

For the EUR

It’s another relatively quiet day ahead on the economic calendar. Key stats include prelim May inflation figures from Germany and Spain.

Business and Consumer confidence figures out of Italy and the Eurozone should have a muted impact, following the EU’s COVID-19 recovery plan announced on Wednesday.

We will expect EU’s recovery plan and the continued easing of lockdown measures to provide support.

The markets will need to track any chatter from Beijing and Washington, however. Any rise in tensions and action from either side will test risk appetite on the day.

At the time of writing, the EUR was up by 0.11% to $1.1018.

For the Pound

It’s yet another quiet day ahead on the economic calendar. There are no material stats due out to provide the Pound with direction.

On Wednesday, we saw the Pound take a hit in response to the threat of the BoE cutting interest rates into negative territory.

BoE Chief Economist Haldane had attempted to pour cold water on such a prospect but to no avail.

Through the day, expect market risk sentiment and any Brexit chatter to be key drivers.

At the time of writing, the Pound was up by 0.05% to $1.2267.

Across the Pond

It’s a busy day ahead on the U.S economic calendar. Economic data includes April durable goods, 2nd estimate GDP numbers, and pending home sales figures for April.

Barring any deviations from 1st estimates, expect April’s core durable goods orders to garner some attention.

Any moves in response to the durable goods orders are likely to be limited, however. The market focus will be on the weekly jobless claims figures.

There’s plenty of optimism as the U.S economy continues to reopen, but whether the markets can stomach another 2m jump remains to be seen.

The Dollar Spot Index was down by 0.17% to 98.893 at the time of writing.

For the Loonie

It’s a quiet day on the economic calendar. There are no material stats due out of Canada to influence the Loonie.

A lack of stats will leave the Loonie in the hands of market risk sentiment and the weekly EIA crude oil inventory numbers…

At the time of writing, the Loonie was down by 0.02% to C$1.3755 against the U.S Dollar.

For a look at all of today’s economic events, check out our economic calendar.

U.S. Dollar Index (DX) Futures Technical Analysis – In Position to Post Closing Price Reversal Bottom

The U.S. Dollar is trading higher against a basket of major currencies late Wednesday after reversing earlier weakness. After feeling some early session selling pressure, the greenback was able to stabilize and move higher against the Euro, British Pound, Canadian Dollar and Japanese Yen.

The move against the Euro came about even as the common currency remained supported by news of a proposal for an economic recovery package to help the Euro Zone region recover from the coronavirus pandemic.

Sterling retreated below $1.2300 as investor focus shifted back to the possibility of negative interest rates in Britain and comments from government officials that not much progress had been made in Brexit negotiations.

Worries about the U.S. response to China’s proposed security law for Hong Kong helped drive U.S equity indexes lower during the cash market session, which in turn increased the U.S. Dollar’s appeal as a safe-haven asset. This move led to lower demand for the Japanese Yen.

At 19:16 GMT, the June U.S. Dollar Index is trading 99.240, up 0.334 or +0.34%.

Daily June U.S. Dollar Index

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through the intraday low at 98.715 will signal a resumption of the downtrend, while a move through the 98.345 swing bottom will reaffirm the downtrend.

The minor trend is also down. A trade through 99.995 will change the minor trend to up. This will also shift momentum to the upside.

The main range is 94.530 to 103.960. Earlier today, the index attracted buyers when it tested its retracement zone at 99.245 to 98.130.

Daily Swing Chart Technical Forecast

Based on the early price action and the current price at 99.240, the direction of the June U.S. Dollar Index into the close on Wednesday is likely to be determined by trader reaction to yesterday’s close at 98.906.

Bullish Scenario

A sustained move over 98.906 will indicate the presence of buyers. This will also put the index in a position to form a potentially bullish closing price reversal bottom. If confirmed, this could trigger a 2 to 3 day counter-trend rally.

Overcoming the 50% level at 99.245 will indicate the buying is getting stronger. This could trigger a rally into the next 50% level at 99.690.

Bearish Scenario

A sustained move under 98.906 will signal the presence of sellers. This could trigger a test of the main bottom at 98.345, followed by the major Fibonacci level at 98.130.

For a look at all of today’s economic events, check out our economic calendar.

Euro Boosted by Huge EU Stimulus Plan

The Euro stood tall against almost every single G10 currency, marching towards a fresh two month higher against the dollar as investors took heart from this positive news. Given how the currency has struggled since falling in March when market players sprinted towards the Dollar’s safe embrace, it could be time for the Euro to shine.

Given how the European Commission coronavirus economic recovery package may boost the likelihood of a synchronized recovery across Europe, the longer term outlook for the Euro is encouraging.

Taking a look at the technical picture, the EURUSD is turning bullish on the daily charts with prices trading around the 1.1000 resistance level as of writing. A solid daily close above this point should signal a move higher with 1.1090 acting as the first point of interest. If the upside momentum propels prices above this point, the EURUSD could venture towards 1.1150 in the medium term.

Alternatively, a decline towards 1.0850 will be on the cards if 1.1000 proves to be reliable resistance.

Dollar waits for fresh catalyst

Where the Dollar concludes this week will be influenced by US-China trade tensions and optimism over economies reopening after an extended lockdown period.

Expect the dollar to appreciate against most G10 currencies if risk aversion makes an unwelcome return during the second half of the trading week. If the mood continues to brighten on economic hopes, then appetite for king Dollar may fall – ultimately sending the Dollar Index lower.

On the data front, preliminary US GDP data on Thursday and a speech from Jerome Powell at the end of the week could spark some additional volatility.

Focusing on the technical, it is the same old story. Prices remain in a wide range with support around 99.0. A strong daily close below this point may swing open the doors lower towards 98.50 and 97.80.

USDJPY eyes 108.00

If in times of uncertainty the Japanese Yen is a trader’s best friend, then what does it become in times of optimism and hope?

It has not been the best of trading weeks thus far for the Yen which has weakened against major currencies. As optimism over economies reopening overshadow trade tensions, appetite for the Yen and other safe-haven currencies are likely to fade in the near term.

A picture is worth 1000 words and this can be said for the USDJPY on the daily charts. Prices are trading near the 108.00 resistance level and could push higher if the Yen continues to weaken. A strong breakout above this point may open a path towards 109.40 in the near term.


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EUR/USD Price Forecast – Euro Rallies on Stimulus Hopes

The Euro initially fell during the trading session on Wednesday to reach down towards the 1.0950 level before turning back around. By doing so, the market showed resiliency and it looks as if it is trying to break out for a bigger move. Was worth noting is that we have formed a couple of hammers on the monthly chart, and that suggests that we are going to see an attempt to break out for a longer-term trend change.

The Euro got a bit of a boost during the day due to the €750 billion recovery bill going through the European Commission, showing signs that perhaps the European Union is starting to get things together. That being said, it is also worth noting that the 200 day EMA is starting to cause a bit of a reaction so I think one of two things are about to happen…

EUR/USD Video 28.05.20

We will either break above the 1.11 handle, and continue to go much higher for the longer-term, or we are simply trying to widen the range in general. This is a messy pair to say the least, and one that I absolutely hate trading. This is because there are very few trends other than to grind lower over the course of the last several years, but grinding being the main characteristic. If the market closes below the 1.1080 level, then it is likely that we pull right back into the previous consolidation area. It is going to be one of these two scenarios, and it could take several days to make the decision, as it is typical of this pair which is the realm of high-frequency traders.

For a look at all of today’s economic events, check out our economic calendar.

EUR/USD Mid-Session Technical Analyis for May 27, 2020

The Euro is edging higher against the U.S. Dollar on Wednesday as investors eyed a fresh European Union stimulus plan, but renewed U.S.-China tensions over Hong Kong may be limiting gains.

In other news, Euro Zone government bond yields edged down on Wednesday, easing off from Tuesday’s highs, as investors waited for proposals about the EU recovery fund which are due to be presented to the European Parliament.

The European Commission will announce a plan to help the EU economy recovery from its coronavirus slump with a mix of grants, loans and guarantees exceeding 1 trillion Euros that raised controversy even before it was announced.

Hopes for a coordinated fiscal response to the coronavirus crisis have been boosted since France and Germany made proposals for a 500-billion-Euro recovery fund.

At 12:08 GMT, the EUR/USD is trading 1.0993, up 0.0011 or +0.10%.

Earlier in the session, European Central Bank President Christine Lagarde said the Euro Zone economy is likely to shrink between 8% and 12% this year as it struggles to overcome the impact of the coronavirus pandemic.

Daily EUR/USD

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was re-established earlier in the session when buyers took out a pair of previous main tops at 1.1008 and 1.1018. A trade through 1.0871 will change the main trend to down.

The short-term range is 1.1147 to 1.0727. Its retracement zone at 1.0937 to 1.0987 is currently being tested.

The main range is 1.1496 to 1.0636. Its retracement zone at 1.1066 to 1.1167 is the primary upside target. This is potential resistance.

The intermediate range is 1.0636 to 1.1147. Its retracement zone at 1.0892 to 1.0831 is potential support.

Daily Swing Chart Technical Forecast

Based on the early price action and the current price at 1.0993, the direction of the EUR/USD the rest of the session on Wednesday is likely to be determined by trader reaction to the Fibonacci level at 1.0987.

Bullish Scenario

A sustained mover over 1.0987 will indicate the presence of buyers. If this move is able to generate enough upside momentum then look for a possible surge into the main 50% level at 1.1066.

Bearish Scenario

A sustained move under 1.0987 will signal the presence of sellers. This could trigger a labored sell-off with potential targets a pair of 50% levels at 1.0937 and 1.0892, and the main bottom at 1.0871.

For a look at all of today’s economic events, check out our economic calendar.

EUR/USD Daily Forecast – Sellers Continue to Defend 1.1000 Area

The dollar sold off on Tuesday as traders from the US and UK returned from holidays which led to another attempt at the 1.1000 handle in EUR/USD.

This level has now served to hold the pair lower on four rallies since the middle of April. However, the momentum remains to the upside and the recent price action suggests there is potential for an upside break.

The dollar is seen broadly rebounding in early trading on Wednesday after the trade-weighted index (DXY) briefly traded near lows not seen since the start of the month.

The commodity currencies have gained the most on the leg of dollar weakness in the early week and the euro is seen at or near lows not seen since March against the Australian, New Zealand, and Canadian dollar.

The economic calendar is light going into the North American session which could lead to a range developing in EUR/USD. On Thursday, the US will release GDP figures from the first quarter which stand to accompany a volatile reaction in the markets.

Technical Analysis

EURUSD Daily Chart

Yesterday’s bullish daily candle engulfed the entire decline that took place since Thursday which is signaling that the pair has resumed the prior uptrend.

The upside momentum remains strong and the probabilities favor a bullish range break for EUR/USD. The key level to watch in the session ahead falls at 1.0992.

An upside break could see the pair make a run towards the next resistance level of 1.1072. Beyond 1.1072, the next target falls at 1.1183.

To the downside, important support is seen at 1.0888 as the level held the pair higher on a 4-hour close basis earlier this week. A break below it would invalidate the bullish outlook.

Bottom Line

  • EUR/USD has eased back from an important resistance level but the upward momentum from yesterday suggests dips will be bought. As a result, the probabilities favor an upside break.
  • US GDP data will be released tomorrow which stands to move the markets.
  • The upside target in EUR/USD in the event of a bullish break falls at 1.1183.

For a look at all of today’s economic events, check out our economic calendar.

The ECB and Brussels Put the EUR in Focus as Geopolitics Tests Risk Sentiment

Earlier in the Day:

It was a relatively busy day on the economic calendar this morning. The Aussie Dollar and Kiwi Dollar were in action, with economic data out of China also in focus.

Away from the economic calendar, the market’s attention returned to U.S – China tensions and China’s security law for HK.

COVID-19 news and numbers did remain supportive, however, with positive vaccine news hitting the news wires in the 1st half of the week.

Looking at the latest coronavirus numbers,

On Tuesday, the number of new coronavirus cases rose by 95,878 to 5,678,282 On Monday, the number of new cases had risen by 83,824. The daily increase was higher than both Monday’s rise and 94,189 new cases from the previous Tuesday.

France, Germany, Italy, and Spain reported 1,535 new cases on Tuesday, which was up from 747 new cases on Monday. On the previous Tuesday, 2,848 new cases had been reported.

From the U.S, the total number of cases rose by 19,185 to 1,725,411 on Tuesday. On Monday, the total number of cases had risen by 19,790. On Tuesday 19th May, a total of 20,688 new cases had been reported.

For the Kiwi Dollar

The RBNZ’s Financial Stability Report was in focus in the early hours.

Salient points from the latest report included,

  • COVID-19 has led to unprecedented economic disruption, with small businesses under stress.
  • Fiscal and monetary policy has cushioned the near-term impact. These include wage subsidies, large scale asset purchases to reduce interest rates, and a record low OCR.
  • Banks are in a strong position to support the economic recovery. The Reserve Bank has adjusted policies to enable banks to keep lending.
  • Measures include:
    • Mortgage deferrals for households and small businesses.
    • Delayed implementation of planned increases to capital requirements by a minimum of 12-months.
    • Eased core funding ratio requirements.
    • Supported the Business Finance Guarantee Scheme by creating a Term Lending Facility.

The Kiwi Dollar moved from $0.61971 to $0.61984 upon release of the report. At the time of writing, the Kiwi Dollar was up by 0.11% to $0.6192.

For the Aussie Dollar

Construction Work Done fell by 1.0% in the 1st quarter, following on from a 3.0% slide in the 4th quarter. Economists had forecast a 1.5% decline.

According to the ABS,

  • Residential work done fell by 1.6%, quarter-on-quarter, and slid by 12.5% when compared with the 1st quarter of 2019.
  • Total construction work down fell by 6.5% in the 1st quarter, year-on-year.

The Aussie Dollar moved from $0.66512 to $0.66530 upon release of the figures. At the time of writing, the Aussie Dollar down by 0.11% to $0.6646.

Out of China

Industrial profit figures for April had little influence. Year-on-year, profits were down by 4.3%, following a 34.9% slump in March. Year-to-date, profits were down by 6.75%, following a 36.7% tumble in March.

The Aussie Dollar moved from $0.66512 to $0.66530 upon release of the figures.

Elsewhere

At the time of writing, the Japanese Yen was up by 0.04% to ¥107.50 against the U.S Dollar.

The Day Ahead:

For the EUR

It’s a relatively quiet day ahead on the economic calendar. While there are no material stats due out of the Eurozone, the ECB and the EU Commission are in focus today.

In the early part of the European session, ECB President Lagarde is scheduled to speak. Expect any chatter on monetary policy or the economic outlook to influence. Lagarde’s speech precedes the release of the ECB’s Financial Stability Review. We will expect the review to be a key area of focus for the markets today.

With the ECB in focus early in the day, Brussels will also be in the spotlight. The European Commission is due to announce the COVID-19 Recovery Fund and EU Budget.

At the time of writing, the EUR was down by 0.10% to $1.0971.

For the Pound

It’s another quiet day ahead on the economic calendar. There are no material stats due out to provide the Pound with direction.

A lack of chatter on Brexit and the risk-on sentiment has provided the Pound with further support this week. Expect any updates on Brexit and COVID-19 to test this support, however.

At the time of writing, the Pound was down by 0.06% to $1.2327.

Across the Pond

It’s also a quiet day ahead on the U.S economic calendar. Following Tuesday’s consumer confidence figures, there are no material stats to influence later today.

A lack of stats leaves geopolitics center stage. On Tuesday, U.S President Trump stated that there would be a U.S response to China’s plans for HK by the end of the week… Measures could include sanctions on China…

The Dollar Spot Index was up by 0.14% to 99.042 at the time of writing, with the U.S – China jitters providing support.

For the Loonie

It’s a relatively quiet day on the economic calendar. Building permit figures are due out later today that will likely have a muted impact on the Loonie.

With concerns over the U.S – China relations and the prospects of sanctions on China resurfacing, we can expect the Loonie to be under pressure.

Much will depend on how Beijing will respond to any steps taken by the U.S government. The continued easing of lockdown measures across major economies, remains Loonie positive, however.

At the time of writing, the Loonie was down by 0.06% to C$1.3785 against the U.S Dollar.

EUR/USD Mid-Session Technical Analysis for May 26, 2020

The Euro advanced on Tuesday, boosted by a weaker U.S. Dollar as growing optimism about a global recovery from the COVID-19 pandemic supported riskier currencies.

“At the moment the Euro is torn between political risks on the one hand and positive sentiment on the markets as a result of further easing of the corona-related restrictions on the other. This morning, the latter is dominating, allowing it to appreciate against the dollar,” said Thu Lan Nguyen, a currency analyst at Commerzbank.

“However, in view of the continued disagreements within the European Union about a corona recovery fund, the single currency is likely to run out of steam quite quickly in Euro-Dollar,” she said.

At 13:30 GMT, the EUR/USD is trading 1.0971, up 0.0076 or +0.69%.

In economic news, the mood among German exporters recovered somewhat in May after a “catastrophic” April, the first full month of coronavirus lockdown measures in Europe’s largest economy, the Ifo Institute said on Tuesday.

“Virtually every sector still expects further declines yet these will be less sharp than had been expected in the previous month,” the Munich think tank said in a monthly release.

The Ifo export indicator based on a survey of around 2,300 manufacturing businesses, rose in May to -26.9 from -50.2. It is a net reading for respondents expecting an increase minus those who see a decline.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum has been trending lower since the formation of the closing price reversal top on May 21.

A trade through 1.1008 will negate the closing price reversal top and signal a resumption of the uptrend. Taking out the 1.1018 main top could launch an acceleration to the upside. The main trend will change to down on a trade through the last main bottom at 1.0766.

The minor trend is up. A trade through 1.1008 reaffirms the minor trend. A trade through 1.0871 will change the minor trend to down. This will also confirm the shift in momentum to the downside.

The intermediate range is 1.0636 to 1.1147. Its retracement zone at 1.0892 to 1.0831 is support.

The short-term range is 1.1147 to 1.0727. Its retracement zone at 1.0937 to 1.0987 is resistance. This zone is currently being tested.

The main range is 1.1496 to 1.0636. Its retracement zone at 1.1066 to 1.1167 is the primary upside target. This zone is also controlling the longer-term direction of the EUR/USD.

Daily Swing Chart Technical Forecast

Based on the early price action and the current price at 1.0971, the direction of the EUR/USD the rest of the session on Tuesday is likely to be determined by trader reaction to the Fibonacci level at 1.0987.

Bullish Scenario

A sustained move over 1.0987 will indicate the buying is getting stronger. This could lead to a test of the two main tops at 1.1008 and 1.1018. Taking out 1.1018 could trigger a surge into 1.1066

Bearish Scenario

The inability to overcome 1.0987 will signal the return of sellers or indicate the buying is getting weaker. This could trigger a pullback into 1.0937. If this level fails then look for the selling to possibly extend into 1.0892 to 1.0871.

For a look at all of today’s economic events, check out our economic calendar.

EUR/USD Price Forecast – Euro Testing Top of Range

The Euro has rallied a bit during the trading session on Tuesday, but it has a significant barrier in the form of the 1.10 level above. The level is the top of a range that we have been in for some time, so it is not a huge surprise to see that the market is starting to pull back slightly. What is worth noting is that the Euro has been rallying until the Americans started to jump on board. The 200 day EMA sits just above the 1.10 level, so that could of course cause a significant amount of resistance as well. Ultimately, I think that the market probably continues to see selling pressure, and therefore likely to go looking towards the 50 day EMA.

EUR/USD Video 27.05.20

It should be noted that the 50 day EMA is sitting right in the middle of the overall range, so it makes sense that we would go back towards that area. Quite frankly, a lot of the exuberance that we are seeing is based upon the idea of finding it a potential vaccine. There are several possibilities right now, but markets seem to get way ahead of themselves for a few minutes every time it is mentioned that something is showing some promise. We are a long way away from that, and therefore I find it a bit difficult to think that we are suddenly going to turn around based upon this news. The markets are looking at two central banks here that are both extraordinarily loose with monetary policy, and therefore neither currency should be overly strong against the other.

For a look at all of today’s economic events, check out our economic calendar.

Dollar Wobbles on Reopening Hopes

The positive market mood should support appetite for risk at the expense of safe-haven assets like the Dollar and Japanese Yen which have both weakened over the past 24 hours. However, the risk-on sentiment is unlikely to last given how escalating US-China trade tensions and global growth concerns remain dominant market themes.

King Dollar was not so mighty on Tuesday, weakening against every single G10 currency thanks to vaccine optimism and reopening hopes. Focusing on the technical picture, the Dollar Index remains in a very wide range on the daily charts with support around 99.0. A strong daily close below this point may swing open the doors lower towards 98.50 and 97.80.

Euro takes advantage as Dollar weakens

The Euro wasted no time in exploiting a weaker Dollar this morning, as prices jumped to a fresh one week high above 1.0936.

Expect the EURUSD to push higher in the week ahead if the Dollar continues to weaken amid the improving market sentiment. Looking at the technical picture, the EURUSD remains in a very wide range on the daily charts with support at 1.0740 and resistance 1.1000.

While a depressed Dollar could push prices back towards 1.1000, it may take a fundamental catalyst for prices to break above this stubborn resistance. Alternatively, sustained weakness below 1.1000 could encourage a move back down to 1.0850.

USDCAD eyes 1.3850

Expect the Canadian Dollar to appreciate this week as Oil prices recover.

If the Canadian Dollar holds its ground against the Dollar, the USDCAD may sink towards 1.3850. A breakdown below this level could pave a way towards 1.3680.

Alternatively, if 1.3850 proves to be reliable support, prices may rebound back towards 1.4050.

Commodity spotlight – WTI Oil

Oil prices are positioned to push higher as economies across the globe relax lockdown measures.

However, gains will most likely be capped by escalating trade tensions and fears around slowing global growth.

Looking at the technical picture, a solid weekly close above $34 may open the doors back towards $40.

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Who Needs China? Optimism and Hope Continue to Drive Riskier Assets Northwards

Onwards and upwards the global equity markets go and the commodity currencies are joining in on the rally.

Just 6-weeks ago, the Aussie Dollar was down at sub-$0.60 levels against the Greenback.

When considering the quite dire economic environment and the grim outlook, the broad-based recovery has been a remarkable one.

The bigger question that needs to be answered, however, is whether the latest breakout is sustainable.

The Here and Now

As we have moved beyond the 1st quarter and April economic indicators, the markets have formed a clear view.

May’s private sector PMIs suggested that the economic meltdown had bottomed out in April. Consumer confidence and business confidence figures have also shown that sentiment has picked up.

There’s one clear issue with the current sentiment, however.

While the U.S and China go back at it and the global supply chain remains broken, central banks and governments will be looking for a consumer-driven economic rebound.

In fact, when the news wires report of small firms leaving stimulus monies untapped, there must be some concern over what lies ahead.

At a minimum, there needs to be a marked bounce back in labor market conditions. That then needs to translate into consumption to fuel the merry-go-round.

The Good News

While there is so much uncertainty, the good news is that new coronavirus cases continue to head downwards. In key economies at least, with Asia and the EU impressing.

It is particularly poignant when considering the fact that we are now reaching that 2-week time-lapse since governments began introducing their lockdown measures, however.

At a minimum, this trend must continue in the next 1-2 weeks and with it, a successful treatment or vaccine.

Only then can the services sector truly expect a marked shift in outlook.

The Bad News

Trump could turn on China and the EU at any time and the China ball has already started rolling.

Throw in the EU, talk of a conflict with Iran and even the U.S severing ties with the Saudis and the geopolitical landscape may change forever.

As we have seen in the past, the markets don’t do too well to change. Just look at the effects of Brexit on the UK economy and the Pound.

So, for Trump there is the hope that, while the U.S economy may have seen its worst quarter since the Great Depression, the U.S equity markets continue to line voter pockets…

Today’s Market Moves

Today, we saw optimism overshadow U.S – China tensions and a gloomy economic outlook once again.

This may well continue should we see progress being made towards a COVID-19 vaccine or treatment drug.

Near-term, however, we will need to begin considering June figures to assess the speed of the economic recovery.

Today’s consumer confidence figures may be positive from a risk perspective. This is assuming that U.S consumer confidence does rise in spite of quite dire weekly jobless claims figures.

That leaves the markets exposed to a market shock, once we begin to digest June numbers…

Let’s face it, it would be almost a dream for labor market conditions, private sector activity, consumer consumption to bounce back to the end of 2019 levels…

At the time of writing, the EUR was up by 0.60% to $1.09603. Assuming that governments and central banks continue to throw money where it’s needed, we could even see $1.13 levels.

For the Aussie Dollar and Kiwi Dollar, we could see even greater gains…

It is a long way to fall though should that optimism shift in June, however.

26/05/20 EUR/USD Daily Chart

EUR/USD Daily Forecast – Euro Regains Upward Momentum as the Dollar Weakens Broadly

After a slow start to the week, the US dollar fell sharply lower in early European trading on Tuesday, triggering a rally in EUR/USD to erase a bulk of the loss from the second half of last week.

EUR/USD pushed higher last week after leaders from France and Europe declared intentions of offering grants as a form of stimulus to economies hit hardest by the Coronavirus.

The pair had topped out last week near the 1.1000 area which has served to hold it lower on three separate attempts since the middle of April.

From a broader perspective, EUR/USD has been trading in a range since April, and volatility has slowed notably since then as well. However, recent price action shows a renewal of bullish demand, hinting of an upward break.

The economic calendar is light in terms of market-moving events in the early week. On Wednesday, speeches from Fed member Kashkari and ECB President Lagarde stand to move the market. On Thursday, the US will release GDP figures for the first quarter. Analysts are looking for a nearly 5% decline in growth.

Technical Analysis

EURUSD 4-Hour Chart

What stands out today is the momentum in the rally for EUR/USD. It signals that the pair is likely to remain firmly bid on near-term bids.

Support for the pair in the session ahead is seen at 1.0949 followed by 1.0924.

To the upside, resistance at 1.0983 has held the pair lower on prior attempts since mid-April on a daily close basis. This could prove to be a major short-term hurdle, although the general upward momentum signals the potential for an eventual break.

The daily close in EUR/USD today stands to send a bullish signal if the pair is able to close near 1.0950 or higher as it would result in a reversal candlestick pattern on a daily chart.

Bottom Line

  • A renewal of upward momentum in EUR/USD in early trading on Tuesday suggests the pair has resumed in the uptrend that started last week.
  • The economic calendar is light for the session ahead, the markets are more likely to react to central bank member speeches tomorrow which highlights resistance near 1.1000 in the session ahead.

For a look at all of today’s economic events, check out our economic calendar.