- The dollar strengthens in the market after Powell’s signals.
- Negative climate in the bags helps the dollar.
- EUR/USD with negative outlook, tries to hold above 1.0800.
EUR/USD fell to 1.0789, hitting the lowest level in two days, and completing a 150 pip retracement from Thursday’s high. It then bounced back and was able to recover above 1.0800. A firmer dollar continues to leave the pair under pressure.
The dollar strengthens
Federal Reserve Chairman Jerome Powell gave clear signs of a 50 basis point hike at the next FOMC meeting on May 3-4. This helped to affirm market expectations about the Fed’s next step in boosting the dollar and played against equities.
The context was negative for EUR/USD which fell sharply, which continued into the European session on Friday, when it hit as low as 1.0789. On Thursday it had climbed to 1.0936, the highest in weeks.
The dollar is rising on all fronts on Friday. ANDThe dollar index (DXY) marked a maximum in years above 101.00 and then trimmed gains. Against this backdrop, EUR/USD bounced higher to 1.0825, where it is trading.
Treasury yields are relatively stable so far on Friday, helping to limit dollar strength for now. In turn, Wall Street futures point to an opening with losses of around 0.25%.
The market is now waiting for the speech of Christine Lagardeto the president of European Central Bank and then it will be published from USA, the S&P Global Manufacturing report (ex Markit PMI) April Preliminary.
The S&P Global of the Eurozone surprised with an unexpected rise, going from 54.9 to 55.8 the integrated indicator, against 53.9 of the market consensus. The manufacturing index fell to 55.3 from 56.5, but a more significant drop to 54.7 was expected.
Technical levels
Source: Fx Street
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