- S&P global PMIs showed that the US economy is expanding at a slower pace.
- Worse than expected Eurozone PMIs stumbled EUR/USD to daily lows below 1.0500.
- The Fed’s Powell was reluctant to cut interest rates when asked in the US House of Representatives.
The EUR/USD falls for the first time this week, down 0.30%, courtesy of a mixed market mood and dismal Eurozone S&P Global PMI numbers released in the European session, which sent EUR/USD lower from daily highs around 1.0580 to daily lows near 1.0482. At 1.0509, EUR/USD is trading at a loss and is poised to continue its way towards the 1.0500 figure.
Risk aversion momentum and dismal EU PMI reports sent the euro down
Sentiment is mixed in the markets. EU global PMIs were worse than expected, all readings missed expectations, although they weighed more heavily on France. The slowdown in Europe is accelerating even as the European Central Bank (ECB) prepares to raise rates at its July meeting, with the aim of controlling inflation.
The EUR/USD pair fell on the above, coupled with risk-on momentum causing the USD to jump. Meanwhile, the US S&P Global PMIs also fell short of expectations, showing that the US economy is also slowing down, but the Federal Reserve, in speaking, put the brakes on the EUR/USD recovery.
The president of the US Federal Reserve, Jerome Powell, in his appearance in the House of Representatives, said that the Fed has an “unconditional commitment to fighting inflation” and added that bringing inflation without affecting the market work would be a challenge.
Furthermore, when Jerome Powell was asked about the possibility of cutting rates, he said he is reluctant to do so while adding that inflation expectations are anchored, but that is not enough as they will come under pressure over time.
Meanwhile, Fed Governor Michell Bowman said further rate hikes of 75 basis points would be needed, adding that more rate hikes would be needed. Bowman said inflation is unacceptably high and has shown no signs of moderating.
Elsewhere, the dollar index, a gauge of the dollar’s value against its peers, rose 0.25% to 104.445, while US Treasury yields fell, reflecting that investors are reassessing a not as aggressive as expected Fed tightening as US S&P Global PMIs were released today.
In the coming week, the EU calendar will include the intervention of the ECB, with McCaul, Fernandez-Bollo, the vice president of Guindos, and the German Ifo indices for June. On the other hand, US New Home Sales and Michigan Consumer Sentiment for June, in their final reading, will shed some light on the US economy.
Technical levels
EUR/USD
Panorama | |
---|---|
Last Price Today | 1.0507 |
Today’s Daily Change | -0.0060 |
Today’s Daily Change % | -0.57 |
Today’s Daily Opening | 1.0567 |
Trends | |
---|---|
20 Daily SMA | 1.0613 |
50 Daily SMA | 1.0615 |
100 Daily SMA | 1.0866 |
200 Daily SMA | 1,115 |
levels | |
---|---|
Previous Daily High | 1.0606 |
Previous Daily Minimum | 1.0469 |
Previous Maximum Weekly | 1.0601 |
Previous Weekly Minimum | 1.0359 |
Monthly Prior Maximum | 1.0787 |
Previous Monthly Minimum | 1,035 |
Daily Fibonacci 38.2% | 1.0553 |
Daily Fibonacci 61.8% | 1.0521 |
Daily Pivot Point S1 | 1.0489 |
Daily Pivot Point S2 | 1,041 |
Daily Pivot Point S3 | 1.0352 |
Daily Pivot Point R1 | 1.0626 |
Daily Pivot Point R2 | 1.0684 |
Daily Pivot Point R3 | 1.0762 |
Source: Fx Street
With 6 years of experience, I bring to the table captivating and informative writing in the world news category. My expertise covers a range of industries, including tourism, technology, forex and stocks. From brief social media posts to in-depth articles, I am dedicated to creating compelling content for various platforms.