- EUR/USD moderated the previous rise to the 1.0770 area.
- The US headline figure, core PCE, failed to surprise markets in April.
- US consumer sentiment is the next thing to watch on the calendar.
The EUR/USD teetering around the 1.0700 area amid mixed trends in risk appetite at the end of the week.
EUR/USD looks well supported around 1.0700
EUR/USD came under moderate selling pressure shortly after hitting new monthly highs near 1.0770 earlier in the session.
In fact, the pair is now trading gains for losses amid the same lack of clear direction in the USD, which managed to bounce off new monthly lows near 101.40 when following the US Dollar Index (DXY).
The pair did not react significantly to the US inflation figures, after headline PCE rose 6.3% in the year to April and 4.9% yoy for core data. Other data for April showed the trade deficit narrowed to $105.94 billion, personal income rose 0.4% month-on-month and personal spending increased 0.9% month-on-month. Later in the American session, the final University of Michigan index will close out the weekly calendar.
What to watch out for around the EUR
The intense dollar selling bias puts EUR/USD on track to challenge the 1.0800 area on the short-term horizon.
Despite the pair’s bullish momentum, the overall outlook for the single currency remains negative at the moment. As usual, spot price action should reflect dollar dynamics, geopolitical concerns and the divergence between the Fed and the ECB.
However, occasional pockets of strength in the single currency should be bolstered by speculation that the ECB could raise rates sometime in the summer, while rising German yields, high inflation and a decent pace of economic recovery in the region also favor an improvement in the mood around the euro.
Technical levels
For now, the pair is down 0.03% at 1.0718 and a break of 1.0459 (low May 18) would target 1.0348 (low May 13, 2022) on the way to 1.0340 (low Jan 3, 2017). On the other hand, the immediate hurdle lines up at 1.0765 (Monthly High May 24), followed by 1.0771 (55-day SMA) and finally 1.0936 (Weekly High Apr 21).
Source: Fx Street
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