ECB speakers fail to boost the euro. US debt concerns weigh. The euro’s gains from yesterday have been reduced today as the USD is strengthening.

ECB Stance and Key Impacting Points on Euro

As US factors determine market appetite, bullish optimism on EURUSD is diminishing.

The majority of today’s events will focus on the US PPI, Fed, and ECB.

European Foundation Backdrop

The euro’s gains from yesterday have been reduced this morning as the USD is strengthening. Despite the US CPI meeting forecasts and calling for roughly three rate cuts by year’s end (according to market pricing).  Risk perception is deteriorating because of uncertainty surrounding US debt ceiling negotiations. As a result, the US greenback has found support vs the euro. And may act as a bottom for the EURUSD rate until a choice is made.

A light economic schedule for the eurozone today has the region’s citizens waiting to hear from more (ECB) officials. Expect stronger talk, especially from ECB’s Schnabel.  Yet, as we witnessed last night, ECB recommendations received little meaningful implementation. The European period has already begun, and the ECB’s Nagel has cited persistent inflation plus an argument for higher rates for extended periods of time. But again, his comments have not been interpreted.

US dollar gain strength on Fed statements

The Dollar Index, which measures the value of the dollar against a basket of 6 currency pairs. It was trading 0.4% up at 101.640 at 03:05 ET (07:05 GMT) following falling by almost 0.3% during the prior session.

Inflation among American consumers moderated somewhat in April, according to data released on Wednesday. Suggesting that the Federal Reserve’s relentless pattern of monetary tightening may be coming to an end.

Dollar declines were however constrained because of the continued ambiguity surrounding the US debt ceiling. And because US Treasury Secretary Janet Yellen on Thursday issued a warning against the possible harm to the global economy.

China’s poor economic Status and US Debit Ceiling in Focus

The Asian session’s disappointing Chinese CPI and PPI data has since depressed feelings about risk. The euro has been affected by worries about China’s economic expansion and domestic demand, which has intensified risk aversion toward the US debt ceiling issue.

The US PPI and jobless statistics will be in the spotlight later today (see the economic schedule). Accompanied by FOMC chairs Waller & Kashkari

Economic Activity Schedule

Technical Perspective

A daily candle closure under this point might spark another drop in the price of the euro. The daily EURUSD price action has breached under the rising channel. The major debt ceiling advice will depend on US factors, that’s why the Relative Strength Index (RSI) shows uncertainty.

Key Technical levels

Major Resistance levels:

• 1.1185
• 1.1096/Channel resistance
• 1.1000
• Channel support

Major Support levels:

• 1.0900