- Downward correction of the dollar, pushes the EUR / USD to new highs.
- The bearish moment still seems to predominate, at the start of the Fed week.
EUR / USD broke above 1.2110 and rose to 1.2124 marking a new high for the day. In this way the euro extended the recovery after having fallen to 1.2092 on Friday, this being the lowest level since May 14. In hours of the Asian session on Monday, the pair tested levels below 1.2100 but remained above.
For now, range runs predominate, with a bias still in favor of the dollarr. The DXY is falling modestly after failing to sustain above 90.50, while the yields of the Treasury bonds do not show significant changes. The 10-year rate remains below 1.50%.
In the Eurozone a 0.8% rise in industrial production was known in April, but all eyes are on the meeting of the Federal Reserve, where it is estimated that it could have a slight bias in favor of an adjustment (hawkish hold); that is, maintain interest rates and the purchase program, but affirm that there are already discussions about the cut in said program or set a date for that. Ahead of Wednesday’s Fed decision, there will be important US data on Tuesday: wholesale inflation and retail sales.
Negative technical outlook for the euro
The sharp decline on Friday left the EUR / USD with a negative bias from a technical point of view. A return above 1.2130 could ease the downward pressure. Above the next resistance is seen at 1.2160. A confirmation above 1.2200 would enable a bullish prolongation.
The EUR / USD is testing the support of 1.2100, which if it finally gives way, would have as a possible first target at 1.2075. Below the next support is seen at 1.2050. At 1.1990 the 200-day moving average appears.
Technical levels
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