EUR/USD testing weekly highs near 1.1280 ahead of ECB, FOMC

• The pair keeps the bid tone unchanged today near the 1.1280 region.
• EU Leaders Summit will discuss Article 50 extension today.
• ECB meeting expected on the dovish side today.

Following Tuesday’s small pullback, EUR/USD has now resumed the upside and is now flirting with weekly highs in the 1.1280 region.

EUR/USD bid ahead of ECB, EU Summit

The pair is navigating the area of multi-day highs in the 1.1280 area following the persistent downside pressure in the greenback, which is once again challenging the key support at 97.00 the figure when tracked by the US Dollar Index (DXY).

Regarding the ECB event, the central bank is expected to keep the monetary status quo unchanged later today. However, investors will closely follow Draghi’s press conference with the main focus staying on the recently announced TLTRO-III and the probable implementation of a tiered deposit rate system.

Later in the NA session, US inflation figures gauged by the CPI will be in the limelight ahead of the publication of the FOMC minutes.

What to look for around EUR

EUR remains under pressure following poor fundamentals in Euroland and the strong up move in the greenback in past weeks. In fact, recent disappointing readings in the region somehow confirm that the slowdown in the bloc and the ‘patient-for-longer’ stance from the ECB could be among us for longer than expected. Against the backdrop of souring risk-appetite trend, the greenback should emerge stronger and is expected to keep weighing on spot for the time being. On the political front, headwinds are expected to emerge in light of the upcoming EU parliamentary elections, where the focus of attention will be on the potential increase of the populist option among voters.

EUR/USD levels to watch

At the moment, the pair is gaining 0.14% at 1.1276 and a breakout of 1.1284 (high Apr.9) would target 1.1318 (55-day SMA) en route to 1.1337 (200-week SMA). On the downside, immediate support emerges at 1.1230 (10-day SMA) seconded by 1.1183 (low Apr.2) and finally 1.1176 (low Mar.7).

Sources: https://forex-station.com (Chart) & https://www.fxstreet.com/news/eur-usd-t ... 1904101013 (Article)

EUR/USD Analysis: Draghi didn't surprise, but harmed the EUR anyway

• US core yearly inflation increased by less-than-anticipated, up by 2.0% in March.
• ECB's Draghi reaffirmed the dovish stance, FOMC Minutes coming next.

The EUR/USD pair traded between 1.1255 an 1.1281 ahead of the ECB monetary policy's outcome, barely reacting to the central bank's announcement, as it left rates unchanged as anticipated. There was no mention to the TLTROs in the accompanying statement, but market players were already aware that details on those would likely be out next June. The pair later peaked at 1.1287, following the release of US inflation. According to the official report, March CPI rose by 0.4% MoM and by 1.9% YoY, surpassing the market's expectations. However, core yearly CPI resulted at 2.0%, below the previous and the expected 2.1%.

ECB's Draghi kept the upside limited, as his statement repeated that the risk remains tilted to the downside and that rates will remain low throughout 2019, or as long as needed. About the recently announced third round of TLTROs, Draghi said that details will be communicated in the upcoming meetings, without confirming the market's expectations of having them by June. He added that policymakers would consider whether preservation of negative rates would require preservation. The EUR/USD pair fell to 1.1253, under pressure despite disappointing US inflation and broad dollar's weakness.

Market's attention shifts now to the FOMC Meeting's Minutes, which will be unveiled later today. Speculative interest will then compare both statements and try to find the imbalances that could trigger a directional move in the pair.

The 4 hours chart for the pair shows that it faltered around the 200 SMA, also around the 38.2% retracement of its latest decline between 1.1447 and 1.1183 at 1.1285 The pair fell to test a bullish 20 SMA, at around 1.125, while the next Fibonacci support comes at 1.1245. If the decline breaks through this last, chances are of a bearish extension. The downward potential is limited, according to technical indicators in the mentioned chart, which are barely retreating within positive levels.

Support levels: 1.1245 1.1200 1.1175

Resistance levels: 1.1285 1.1315 1.1350

Source: https://www.fxstreet.com/analysis/eur-u ... ent=thread

Are there any major fundamentals next week?

mlawson71 wrote: Sun Apr 14, 2019 11:47 pm Are there any major fundamentals next week?

Nope! The only high impact news is USD Gross Domestic Product Annualized on Friday but that's it.

EUR/USD analysis: advance could extend up to critical 1.1350

EUR/USD Current Price: 1.1300

• A shortened week will include key data on EU business growth.
• Risk appetite boosted the EUR on Friday, yet long-term bearish trend still firm.

The EUR/USD pair surged to 1.1323 on Friday, retreating at the end of the day to finish the week around the 1.1300 level. The American currency came under selling pressure amid resurgent risk appetite, which sent worldwide stocks to the upside. The catalyst, was the beginning of the earning seasons in the US, with JP Morgan reporting record revenues and profits in Q1. Dollar's slump followed an attempt to recover ground Thursday, which ended being reversed, so the currency reached fresh multi-week lows against most rivals, increasing the risk of such a move to continue. Further supporting the pair's advance, EU Industrial Production fell by less-than-anticipated, down by 0.2% MoM and by 0.3% YoY, while the US Michigan Consumer Sentiment declined to 96.9 in April, according to preliminary estimates, from a previous 98.4.

The upcoming week will be a shortened one with most markets closed on Good Friday, as only Japanese markets will open that day. Nevertheless, there's plenty of relevant data scheduled, with the most relevant being business activity updates in the EU, in the form of April preliminary Markit PMI. This Monday, there's nothing scheduled in the EU, while the US will only offer the NY Empire State Manufacturing Activity, forecasted at 6.0 vs. the previous 3.7, and February TIC Flows.

From a technical point of view, the EUR/USD pair has met resistance at around the 50% retracement of the 1.1447/1.1183 decline but held above the 38.2% retracement of the same slide at around 1.1285, the immediate support. In the daily chart, a long-term descendant trend line which comes from September high stands well above the current level, while a mild bearish 100 DMA converges with the 50% retracement of the same decline at around 1.1350. In the mentioned timeframe the pair settled above its 20 DMA, while technical indicators advanced, the Momentum still unable to enter positive territory and the RSI currently at 53, all of which leans the scale to the upside, although only above the mentioned trend line, the longer term bearish trend will be at risk. Shorter term, and according to the 4 hours chart, the pair finished the week above all of its moving averages and with the 20 SMA already advancing below the 100 SMA, somehow suggesting buying interest remains strong. Technical indicators have resumed their advances within positive ground after reaching overbought territory, also supporting further gains ahead, as long as 1.1285 continues to limit the downside.

Support levels: 1.1285 1.1245 1.1200

Resistance levels: 1.1315 1.1350 1.1390

Source: https://www.fxstreet.com/analysis/eur-u ... 1904141533

Good then, I hope we'll have a steady week without any surprise whipsaws.

EUR/USD Technical Analysis: Bears driving the market towards daily lows

EUR/USD daily chart

• EUR/USD is trading in a bear trend below its 200-day simple moving average (SMA).

EUR/USD 4-hour chart

• EUR/USD is trading above the main SMAs suggesting a bullish bias in the medium-term.

EUR/USD 30-minute chart

• EUR/USD is trading below the 50 and 100 SMAs suggesting a correction down in the short-term.
• The current break below 1.1300 should lead to 1.1280 and 1.1250 to the downside.
• Key resistance is at 1.1330 followed by 1.1360 level.

Source: https://www.fxstreet.com/news/eur-usd-t ... streetnews

It does look quite bearish to me. I think it may drop to 1.1250.

Scope for short covering in EUR/USD - SocGen

What's next for the euro
Societe Generale Research discusses EUR/USD outlook, and still sees a scope for limited near-term gains on short-covering.

"The euro is cheap for good reason (little growth, negative rates) and the dollar is expensive for equally good reason (higher rates and more growth). While the G2 currencies are locked in place, central bankers are making sure that a repeat of 2008 is delayed and supporting global asset prices more than global growth. That's going to end (badly) in due course but for now, using negative-rate currencies to fund longs in (slightly) higher-yielding ones continues to pay dividends," SocGen notes.

"The planet is long USD. The FX market is now long the US dollar across the board, and dormant volatility makes the space seem threateningly quiet. Speculators have amassed their biggest EUR shorts since 2016, suggesting imminent short covering, but leading to a bounce of only limited amplitude. AUD and CHF have reached more structural short levels, but positions are more stable. The timing of a positioning-driven bounce is thus more challenging to establish, but it should be more meaningful when it happens," SocGen adds.



Source: https://www.forexlive.com/news/!/scope- ... n-20190418

EUR/USD stalls the corrective bounce ahead of 1.1250, US data eyed

• Thin liquidity and no macro drivers keep the recovery in check.
• USD index retreats from 2-week highs on Mueller’s report.
• Consolidation mod to extend ahead of US housing data.

The bulls lack further momentum in the European session, sending the EUR/USD pair back into the familiar range between 1.1240-50 levels, as they await the US housing sector data for some trading impetus amid Easter holiday-thinned quiet trading.

The spot attempted a tepid bounce from the weekly lows of 1.1227 after the Euro got hammered across the board on disappointing German and Eurozone manufacturing PMI numbers that re-ignited Euro area growth concerns.

Adding to the downside in EUR/USD, the US dollar caught a fresh bid-wave across the board on above-forecast US retail sales data. The macro data divergence between the Eurozone and the US continues to remain in favor of the USD bulls.

Looking ahead, the recovery attempt in the pair, courtesy of broad USD pullback on Mueller’s report, appear shallow, as the technically the pair remains exposed to the downside risks, with the yearly lows at 1.1177 seen as the next likely target.

More so, the recent in-fighting within the Italian government over the graft scandal could also weigh negatively on the shared currency and keep the upside attempts limited. Italy’s Di Maio: Italy's League threatening to bring down government

Meanwhile, markets eagerly await the US housing starts and building permit data to bring some life to the otherwise Good Friday holiday-thinned/ data-dry trading session.

EUR/USD Technical Levels
Sources: https://forex-station.com (Chart) & https://www.fxstreet.com/news/eur-usd-s ... 1904191012 (Article)

Let's see whether there will be a breakout above 1.1250 and a rally towards 1.1300.