After reaching new YTD highs and increasing on Wednesday, the EURUSD remains optimistic in the near term. The pair was rejected from its recent high and pulled down as the US Dollar rose. The time for a rally above 1.1050 is running out.
In May, the German Gfk Consumer Confidence survey improved from -29.3 to -25.7. The Eurozone (EZ) consumer confidence data is coming on Thursday. Friday will be a pivotal day, with German inflation and EZ GDP growth. The European Central Bank (ECB) will convene next week.
A rate rise appears to be a certain conclusion, but the issue is whether it will be 25 or 50 basis points. The most recent wave of data favors a 50-basis point increase, but fresh financial worries and declining inflation make this unlikely. Doves are given arguments.
On Wednesday, the Euro excelled, while the US Dollar showed mixed outcomes. On the same day, the EURUSD reached new 13-month highs, while the AUDUSD and NZDUSD fell to their lowest levels in a month. The Dollar, however, finished the day higher as Wall Street fell again. The US will release Q1 GDP and consumer inflation on Thursday, both of which are significant statistics ahead of the FOMC meeting next week.
EURUSD Technical Outlook
The EURUSD climbed on Wednesday, reaching 1.1094, its highest level since March 2022, before falling below 1.1050. The trend is up and steady, but the Euro has yet to make a sustained push towards 1.1100.
The longer it takes, the more probable a deep correction will occur. However, with major events on the horizon, investors may remain on the sidelines.
The EURUSD is supported by a bullish 20-day Simple Moving Average (SMA) around 1.0950 on the daily charts. The pair is seen above an uptrend line on the 4-hour chart.
Fresh highs are possible as long as it stays above 1.0970; a break below would first target 1.0950, then 1.0910.
