Euro Weekly prediction: EURUSD squeak out the Week. Event risk is provided by third forecasts of the euro area’s GDP and US ISM services figures.
Euro Key Considerations
EURUSD Located on a Major Supporting Zone Doji Candle Closure Printing for the Weekly Timescale. Retracement on the way?
The risk of events is provided by third forecasts of the euro area’s GDP and US ISM services indicators.
According to market players’ – Repricing, the probability of a 25 bps raise from the Federal Reserve in June has fallen to 25% from about 64% a week before.
Euro performed badly vs other G7 currencies. the prior week
Last week, the Euro suffered losses versus the key G7 competitors. With the EURGBP trading near lows last reached in Nov/Dec 2022. However, EURUSD continued to be the focus of attention as it was headed to a Doji weekly candle closure after Friday’s abrupt fall.
From the standpoint of the ECB, not much has shifted, with authorities broadly betting on one or two further 25bps rises. This is in contrast to a decline in inflation in the euro zone this week. Which is supported by remarks made by ECB policymakers after the inflation release. The figures are not expected to convince the Central Bank to delay raising interest rates in June.
Following the inflation data, the Euro made large gains thanks to the US’s debt ceiling deal. Which caused the US dollar to fall. Though the rate increase forecasts for the Fed’s June meeting rose after the release of the NFP data and the US job report on Friday, The US dollar only experienced a brief period of depreciation.
The Week In-front, ISM Data, and a Third Estimate of Euro GDP
As we start a new week, there are not many dangers or economic information releases that are relevant to the Euro Zone. However, the US ISM services PMI figures and the June 8 deadline for the third projections of Euro Zone GDP growth pose the most danger to the EURUSD duo.
Given the fact that the US economy is mainly service-based and ongoing worries about services inflation. The Fed may closely monitor the release of the data. A strong reading would cause the Fed to aggressively reprice its rate rise forecasts. Which would increase the negative risk for the EURUSD.
Economic Activity Schedule for Next Week
TECHNICAL PERSPECTIVE
Source: TradingView
On the EURUSD weekly graph aforementioned, one observe that the price has fallen to a crucial support level. Before the EUR/USD surged to its YTD top. The last breakthrough took place in early March at the 1.0700 region. After tempting a break below this week The duo is expected to finish the week again on the verge of the 1.0700 mark and producing a Doji candle.
When we zoom out to a daily timescale, then observe that the uncertainty at the 1.0700 level has persisted. The price has now tested and rejected the support level 6 trading days in a row. As market expectations, particularly those related to the US currency and Fed rate rises, continue to fluctuate.
Before attention turns to the psychological 1.0500 threshold. A breach of the critical 1.0700 area might allow for another test of the 1.0600 level. A move upward beyond here has the challenging job of regaining control over the 100-day MA and resistance around roughly 1.0810.
Considering that the EURUSD has been trapped over the MA from Nov 2022. The 100-day MA may prove to be obstinate. The psychological 1.1000 area may come into view upon a breach of the 1.0800 level. In advance with the central bank’s meetings later this month. We could be in for another week of range-bound pricing activity within the 1.0600 and 1.0800 ranges.
