- EUR/USD recovers the area above the 1.0500 level.
- Germany’s flash CPI was 7.4% yoy in April.
The single currency leaves the area of recent lows and encourages EUR/USD to advance beyond 1.0500 after unexpected results in the US calendar.
EUR/USD bounces away from lows after US data.
EUR/USD is now attempting a tepid rebound after the first revision of US GDP showed that the economy is expected to have contracted 1.4% on an annualized perspective over the January-March period.
However, the pair’s negative performance seems unchanged in the context of a stronger dollar, while yields on both sides of the ocean have now left behind initial pessimism and returned to positive territory.
On the national calendar, preliminary German inflation figures signaled that the CPI is expected to rise 7.4% in the year to April and 0.8% from the previous month.
What to look for around EUR
EUR/USD price action shows further deterioration and revisits the below 1.0500 zone for the first time since January 2017. The outlook for the pair remains tilted to the bearish side, always in response to dollar dynamics. , geopolitical concerns and the Fed-ECB divergence. Meanwhile, occasional pockets of strength in the single currency should be bolstered by speculation that the ECB could raise rates sometime around June/July, while rising German yields, elevated inflation and a slower pace decent economic recovery in the region are also supported by an improving mood around the euro.
Technical levels
So far the pair is down 0.48% at 1.0504 and a break below 1.0480 (28 Apr 2022 low) would target 1.0453 (11 Jan 2017 low) en route to 1.0340 (low of January 3, 2017). On the upside, the next hurdle appears at 1.0936 (weekly high Apr 21) followed by 1.1000 (round level) and finally 1.1005 (55-day SMA).
Source: Fx Street
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