EUR/USD trims early gains, falls back to 1.0400 on comments from ECB’s Villeroy

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  • EUR/USD has fallen back to around 1.0400 after comments from the ECB’s Villeroy gave it a boost earlier in the day.
  • Risks remain skewed to the downside amid the divergence in monetary policy between the Fed and the ECB, as well as the divergent economic outlook for the Eurozone and the US.

The EUR received a short-lived boost from French central bank director Francois Villeroy de Galhau’s comments during early European trading, with Villeroy noting that the bank will closely monitor exchange rate developments, which has been an important driver of imports. inflation. Too weak a euro would run counter to the ECB’s price stability objective, Villeroy added, in comments suggesting the euro’s recent decline is raising concerns at the ECB.

But a broadly dovish tone on risk appetite and yuan weakness in the wake of China’s latest downbeat industrial production and retail sales data for April kept global growth concerns in focus and capped any attempts at a rebound. EUR/USD almost hit 1.0440, but has since dropped back to around 1.0410, where it traded again flat on the day as currency markets turn their attention to upcoming event risk later in the day. week.

US retail sales data is due out on Tuesday before the US open and then Fed Chairman Jerome Powell will speak later in the day. He is expected to reiterate his position recently taken, and the position also unanimously taken by other Fed policymakers, including New York Fed President John Williams, on Monday, that inflation is unacceptably high and as a result , interest rates must be raised “quickly” towards neutral.

Despite the ECB becoming more aggressive (Villeroy said the June meeting would be “decisive”, setting up hikes for July), traders remain reluctant to buy on EUR/USD rallies with the Fed still substantially more aggressive on comparison. The divergence in economic outlook between the euro zone and the US is another factor weighing on the pair’s long-term prospects, with the impact of the EU ban on Russian oil imports still unknown, yet to be seen. agree, in the bloc’s economy. Many strategists continue to call for EUR/USD to break even in the coming weeks/months.

Technical levels

EUR/USD

Panorama
Last Price Today 1.0423
Today’s Daily Change 0.0010
Today’s Daily Change % 0.10
Today’s Daily Opening 1.0413
Trends
20 Daily SMA 1.0607
50 Daily SMA 1.0822
100 Daily SMA 1.1065
200 Daily SMA 1.1315
levels
Previous Daily High 1,042
Previous Daily Minimum 1,035
Previous Maximum Weekly 1.0592
Previous Weekly Minimum 1,035
Monthly Prior Maximum 1.1076
Previous Monthly Minimum 1.0471
Daily Fibonacci 38.2% 1.0393
Daily Fibonacci 61.8% 1.0376
Daily Pivot Point S1 1.0368
Daily Pivot Point S2 1.0324
Daily Pivot Point S3 1.0298
Daily Pivot Point R1 1.0438
Daily Pivot Point R2 1.0464
Daily Pivot Point R3 1.0508

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Source: Fx Street

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