The EURUSD falls for the third day in a row, despite widespread USD positive sentiment.
The EURUSD pair fell for the third day in a row on Thursday, hovering near its lowest level since early April. Which was reached the previous day.
The USD is being supported by optimism over the US debt ceiling and aggressive Fed predictions.
The US Dollar (USD) is nearing a two-month high and is viewed as a primary factor impacting on the major. Several Federal Reserve (Fed) officials’ recent hawkish views have pushed back against market expectations for interest-rate decreases later this year.
This, together with the new confidence that the US debt ceiling would be increased. Continues to sustain rising US Treasury bond rates and strengthen the currency.
Indeed, US President Joe Biden and House Speaker Republican Kevin McCarthy emphasized their intention to reach an agreement to increase the government’s $31.4 trillion debt cap as soon as possible. This is beneficial. calms worry of a historic American debt default and enhances investor confidence.
As seen by the equities markets’ generally optimistic tone. As a result, traders are hesitant to place strong bullish wagers on the safe-haven Greenback. Aside from that, speculations on the European Central Bank (ECB) raising interest rates again should help limit losses for the EURUSD pair.
In reality, ECB President Christine Lagarde has previously stated that efforts to reduce high inflation are not complete. And that there are elements that might cause considerable upside risk to the inflation forecast. This confirms the idea that additional interest-rate rises are on the way and calls for prudence before preparing for any further depreciation of the EURUSD pair. Market investors are now looking ahead to the US economic calendar. Which includes the typical Weekly Initial Jobless Claims. The Philly Fed Manufacturing Index, and Existing Home Sales.
Traders will also take cues from statements by important FOMC members. Which will increase USD demand and offer some momentum to the EURUSD pair, along with US bond rates. Aside from that, events surrounding the US debt-limit discussions and broader risk sentiment should add to the creation of short-term trading opportunities in the major.
Technical Outlook
EURUSD pair has managed to keep its head above the 100-day Simple Moving Average (SMA). Which is now around the 1.0800 level.
A break below will be seen as a new trigger. encourage negative. Traders and prepare the way for the recent fall from a high to be extended. Spot prices may decline towards the 1.0755-1.0750 support area before settling at the 1.0700 round number.
The negative trend might be further towards 1.0600. With some support between 1.0640-1.0635.
On the other hand, any effort to rebound above the mid-1.0800s may now encounter. Some resistance at the 1.0875-1.0880 zone ahead of the 1.0900 barrier.
The latter corresponds to the weekly high, over which a new wave might propel the EURUSD pair towards the 1.0960 support breakpoint.
The bias has shifted again in favor of bullish traders. Setting the stage for a rise past level of 1.1000.
