untitled design

EUR/USD dips to test 1.0750 support as triple bottom remains in play

  • The EUR/USD pair will end the week with a decent gain of 0.89%.
  • US economic data was mixed, although it does show a slowdown in the economy.
  • ECB policymakers remain focused on tackling high levels of inflation in the Eurozone.

At the end of the American session, the pair EUR/USD it fell 0.64% or 69 points. The risk drive did not help the euro (EUR), which, under pressure from a banking crisis that threatens to spread to the Eurozone, weakened the common currency. At the time of writing, the EUR/USD pair is trading at 1.0759.

EUR/USD falls on strong dollar and weak EU PMIs

Despite experiencing new turmoil, the US stock market is poised to end the week on a positive note. Deutsche Bank shares fell sharply on concerns about the possibility of default, which was reflected in a 220 basis point increase in Credit Default Swaps (CDS). Although this hurt Wall Street early in the session, investors seemed to dismiss these fears and instead speculated that the Federal Reserve (Fed) would lower interest rates in 2023.

Wall Street ended the week with gains. Deutsche Bank shares fell sharply due to concerns that banks could default, as evidenced by the 220 basis point rise in Credit Default Swaps (CDS). Although this initially caused some concern on Wall Street, investors eventually dismissed these fears, speculating that the Federal Reserve (Fed) would cut interest rates in 2023.

St. Louis Fed President James Bullard said rates would need to rise further to reach the 5.50-5.75% range, which would mean an additional 75 basis points of rate hikes on top of the recent rise in the rate. Fed from 4.75%-5.00%. For his part, the President of the Atlanta Fed, Raphael Bostic, commented that the decision made in March was not easy, since there was a lot of debate and it was not an easy choice.

Thomas Barkin, President of the Richmond Federal Reserve, stated that he considered the banking sector to be very stable when they arrived at the meeting. Therefore, the right conditions were in place to apply monetary policy as planned.

The S&P Global PMI showed an improvement in March, beating both expectations and the previous month’s data. Although the Manufacturing Index remained in a state of contraction, Durable Goods Orders fell 1%, still an improvement on the previous month’s reading.

In the euro zone (EU), the global S&P PMIs for March were positive, except for the Manufacturing component, which remained in recessive territory. Those responsible for the monetary policy of the European Central Bank (ECB), headed by its president Christine Lagarde, crossed the press cables stating that there is no compromise between prices and financial stability.

The President of the Bundesbank, Joachim Nagel, commented that it is not convenient to pause, since inflation, which in Germany, the largest economy in the euro zone, is around 6%, will take too long to return to the target of 2 % set by ECB: “Wage developments are likely to prolong the current period of high inflation rates,” Nagel said in Edinburgh: Inflation will be more persistent.”

EUR/USD Technical Analysis

EUR/USD Daily chart

EUR/USD failed to hold onto its earlier gains, although the triple bottom chart pattern remains in play as long as it holds above 1.0759. A break of this last level would invalidate the pattern and open the door for further losses. On the upside, the first resistance would be at 1.0800, followed by 1.0900, before the yearly high at 1.1032.

EUR/USD

Overview
Last price today 1,076
today’s daily change -0.0071
today’s daily variation -0.66
today’s daily opening 1.0831
Trends
daily SMA20 1.0656
daily SMA50 1,073
daily SMA100 1.0607
daily SMA200 1.0333
levels
previous daily high 1,093
previous daily low 1.0824
Previous Weekly High 1,076
previous weekly low 1.0516
Previous Monthly High 1.1033
Previous monthly minimum 1.0533
Fibonacci daily 38.2 1.0865
Fibonacci 61.8% daily 1.0889
Daily Pivot Point S1 1.0794
Daily Pivot Point S2 1.0756
Daily Pivot Point S3 1.0688
Daily Pivot Point R1 1.0899
Daily Pivot Point R2 1.0967
Daily Pivot Point R3 1.1005

Source: Fx Street

You may also like

Get the latest

Stay Informed: Get the Latest Updates and Insights

 

Most popular