EUR/USD daily chart
Eurozone PMI data was somewhat mixed, but overall it was saved by better German PMI numbers. This continues to give the ECB some breathing room after the impending rate cut in June, at least. This helps the euro just a little, with the dollar also looking subdued amid a more favorable risk-on mood today.
Stocks continue to rise as the mood music is supported by Nvidia’s earnings after yesterday’s close. This helps to see the Aussie and Kiwi also continue to rise against the Dollar.
Coming back to EUR/USD, the pair fell to test its 100-day moving average (red line) after French PMI data earlier. But since then it has rebounded back to 1.0845 currently.
So, what’s next for the couple?
From a technical perspective, the pair sees support levels between 1.0800 and 14, with the 200-day moving average (blue line) just below as well as at 1.0787. These elements will be crucial to prevent any bearish momentum from accelerating at the moment.
As for the upside, there is modest daily resistance from the April high at 1.0885. And this limits any upward momentum for the moment.
So something has to give on either side of these levels for the next trend step to occur.
From a fundamental point of view however, the euro has yet to determine what the ECB will do after June. And that could take some time to sort out depending on how inflation plays out in the coming months.
On the dollar side, everything revolves around Big Data. And there are the US PMI figures to watch at least later.
That aside, it’s a tall order for traders to anticipate anything beyond two rate cuts for the Fed this year. This will likely limit any decline in the dollar until the Fed’s rhetoric changes. Currently, traders are again forecasting rate cuts of around 40 basis points for the year.
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