The single currency regains some of its composure, allowing EURUSD to move away from Thursday’s multi-week lows at 1.0700.
EURUSD examines the US docket and debt ceiling.
The EURUSD trades with modest gains after the opening bell in Euroland at the end of the week. Despite some selling pressure in the dollar and renewed confidence over the US debt ceiling.
On the latter, market participants appear to be favoring the risk complex on Friday. After Republican lawmakers and President Biden appeared to be getting closer to a deal to reduce spending and raise the debt ceiling before a potential default that could be devastating to the economy and global markets. Indeed, negotiators are considering a plan that would limit most federal spending. While lifting the country’s $31.4 trillion debt cap for two years.
In the eurozone, Consumer Confidence in France remained unchanged in May at 83, while the same figure is coming later in Italy.
In the United States, the release of PCE and Core PCE inflation numbers will be at the core of the debate later in the NA session. Furthermore, the current month’s Trade Balance, Personal Income/Spending. Durable Goods Orders, and the final print of the Michigan Consumer Sentiment Index are also due.
What to watch for the Euro.
EURUSD sell-off appears to have peaked just ahead of the critical 1.0700 zone this week.
The motion of the euro’s value is projected to closely mimic that of the US dollar and will be influenced by any variations in approach between the Fed and the ECB in terms of interest rate adjustment plans.
Moving forward, aggressive ECB-speak continues to promote future rate rises, despite some loss of momentum in the region’s economic fundamentals.
This week’s key events in the eurozone include Germany’s final Q1 GDP growth rate and GfK Consumer Confidence (Thursday) – Italy and France. Friday is Consumer Confidence Day.
On the back burner: the continuation of the ECB hike cycle in June and July (and September?). The impact of the Russia-Ukraine conflict on the region’s GDP prospects and inflation projections. Inflation risks.
Technical levels to keep an eye.
The pair is now up 0.15% at 1.0741, and a break over 1.0880 (55-day SMA) would target 1.1000 (round level) on the way to 1.1095 (2023 high April 26). Immediate contention, on the other hand, is at 1.0707 (monthly low May 25), followed by 1.0516 (low March 15), and lastly 1.0481 (2023 low January 6).
