- The euro is snapping a three day gaining streak against the dollar.
- EUR/USD falls from one-week highs to 1.0493 and trims losses.
- No impact data ahead.
The EUR/USD extended the lows and fell to 1.0493 marking a fresh low for the day. It then bounced back to 1.0530 but lost steam and in the run up to the American session it is approaching 1.0500 on a dollar recovery.
The green ticket gains ground after three days with losses. It recovers particularly against the most important European currencies. DXY is up 0.32% and trading at 103.62, having bottomed hours ago at 103.19, the lowest since May 5.
The recovery of the dollar is accompanied by a fall in the equity markets. Wall Street futures are in the red. The S&P 500 fell 0.61%, while the Dow Jones dropped 0.45%. In turn, Treasury bond yields continue to crawl. The 10-year tranche yields 3.00% and the 30-year bond is at 3.19%, maximums in one week.
Regarding data, the final reading of inflation in the Eurozone showed a rise in the consumer price index of 0.6% in April, without giving surprises. The annual rate went from 7.5% to 7.4%. In the US, the report on building permits and housing starts will be published. Patrick Harker, president of the Philadelphia Federal Reserve, will speak on the economic outlook. In Europe, comments from government officials European Central Bank They continue to mention and point to a rise in interest rates soon, although Pablo Hernández de Cos warned that the process should be gradual.
Down, but still with some strength for the euro
Wednesday’s drop still looks like a correction from the recent strong rally in EUR/USD. A confirmation below 1.0480 would already anticipate that the momentum may be gone. Beneath this is support at 1.0450 and 1.0415. Returning above 1.0540, the bullish tone could intensify, for a test of 1.0550/55. The next strong barrier is at 1.0580.
Technical levels
Source: Fx Street
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