EUR/USD unable to recover, consolidates below 1.2300
- US Dollar confirms the break of last week range.
- Short-term technical points to more losses.
- Key data ahead: EZ CPI, US PMI and ADP.
The EUR/USD pair is consolidating daily losses, and also under the 1.2300 area. The euro failed to hold on top of 1.2300 and fell to 1.2252, reaching the lowest level in 13 years. During the last hours, the pair remained steady moving within 1.2275 and 1.2255.
The decline took place amid a rally of the US Dollar against European currencies and the yen. The greenback benefited from rising US yields and also by the recovery of equity prices in Wall Street. The DOW JONES was up 1.54% near the end of the session and the NASDAQ 1.10%, despite Trump’s comments against Amazon.
No impact from data
Data released today had no significant impact. German Retail Sales came below expectations (0.7% vs 0.8%) and EZ Markit Manufacturing PMI unchanged from the preliminary reading (56.6). In the US, the IBD/TIPP Economic Optimism index dropped in April to 52.6 against the 55.2 of market consensus. Economic data to be released on Wednesday include Eurozone March CPI, and in the US, the ADP employment report, PMI, Factory Orders and the ISM Non-manufacturing. The key report will be Friday’s NFP.
Technical outlook
“The pair is at the lower end of March's range, having bottomed around the current level multiple times over these last few weeks. The monthly low was set at 1.2239 on March 20th and is likely that a break below the level will trigger stops, resulting in further slides ahead”, said Valeria Bednarik, Chief Analyst at FXStreet.
According to her the short-term technical picture favors a new leg lower, given that in the 4 hours chart, selling interest once again contained the advance around 1.2340, where the 100 and 200 SMAs converge flat, while the pair is now developing below a bearish 20 SMA. “Technical indicators in the 4 hour chart failed for a second consecutive day to advance beyond neutral territory, now below their mid-lines, although without enough momentum to confirm a bearish breakout”, concluded Bednarik.