- The EUR/USD accumulates weekly losses close to 2.12%, the biggest loss since June 2021.
- Market E lifted the euro outlook after hitting a yearly low at 1.0514.
- EUR/USD Price Forecast: Ready to test Jan 2017 swing lows around 1.0340.
The EUR/USD extended its decline, which accelerated on April 22 after closing around 1.0831. Since then, the pair has tumbled over 400 pips, hitting a fresh 5-year low around 1.0514 on Wednesday. At 1.0564, the EUR/USD recovered some ground, aiming to end the day with losses for the fifth consecutive trading day.
Shanghai poised to ease lockdown restrictions, market sentiment improves
Investor sentiment has improved since the middle of the American session. Probably in the China news, as Shanghai is about to ease lockdowns following a Covid-19 outbreak that hit China’s second-largest city a couple of weeks ago, threatening to disrupt the China-side component. supply from the world’s second largest economy. Meanwhile, the conflict between Ukraine and Russia seems to be dragging on longer than expected. Furthermore, Russia’s retaliation against “unfriendly” countries began on Tuesday, when Russian gas producer Gazprom stopped gas flows to Poland and Bulgaria, as both countries refused to pay for it in rubles.
The dollar remains buoyant, as the US Dollar Index shows, breaking above the 103.00 level for the first time since Jan 4, 2017. At the time of writing, it stands at 102.846, up nearly 0.53%. Meanwhile, the 10-year US Treasury yield rose 7.5 points on the day to 2,799%.
Next on the economic calendar are the April consumer price figures from the euro zone. On the other hand, first quarter gross domestic product is due out on Thursday and on Friday, the Fed’s favorite inflation gauge, core PCE, is expected to decline to 5.3% from 5.4% yoy.
EUR/USD Price Forecast: Technical Outlook
EUR/USD remains on the defensive and looks like it could head towards the January 2017 lows around 1.0340. The EUR/USD registers its worst week since June 2021 and accumulates losses close to 2.10%. Furthermore, momentum indicators like the Relative Strength Index (RSI), although in oversold conditions, appear poised to post lower readings. At the time of writing this article it stands at 27.09.
That said, the first support for the EUR/USD would be 1.0500. A break of the latter would expose 1.0450, followed by 1.0400, and then a test of the January 2017 cycle lows near 1.0340.
Technical levels
Source: Fx Street
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