EURUSD: space for relaxation?
The US Producers Price Index in April was at level of 0.5% on a monthly basis, a bit above 0.3% forecasted by the market. Core inflation in the US eased to 3.6% in April on a yearly basis, which was fully in line with market expectations. At the same time, it was lower from the previous post at 3.8%. Inflation rate on a yearly basis was standing at 3.4% in March. Retail Sales were at 0% in April, lower from the market estimate at 0.4%. Building Permits preliminary for April was at level of 1.440M, a bit lower from market forecast at 1.48M. Industrial Production in April was standing at 0%, and -0.4% on a yearly basis.
Inflation rate in Germany final for April was 2.2% on a yearly basis, without change from the previous post. On a monthly basis, inflation was standing at 0.5%. Core inflation rate in the Euro Zone final for April was 2.7% y/y, in line with market expectations. Inflation was standing at 0.6% on a monthly basis and 2.4% on a yearly basis. GDP Growth rate second estimate for Q1 in the Euro Zone was 0.3% and was in line with the market forecast. The same indicator was standing at 0.4% on a yearly basis. Industrial Production in March in the Euro Zone eased to -1%, much better from the previous post of -6.3%.
The US inflation data made an impact on the USD, which lost some of its value during the week. The highest level reached of the eurusd pair during the week was 1.0896. Still, the currency pair is ending the week modestly below this level. During the whole week the currency pair was in a bullish mood. The RSI reached the level of 67, which is still not clear overbought market side, which leaves some space for the parity of the pair for a move to the higher grounds, until the clear overbought side is reached. Moving averages of 50 and 200 days are still moving as parallel lines, not indicating that actual cross occurred.
During the week the pair was testing 1.08 resistance line, which was clearly breached. However, there has not been strength for a move above the 1.09 line. A breach of 1.08 resistance opens a path for a next resistance at 1.10, however it is questionable at this moment whether the market will have strength to push the currency pair to this level. Based on current charts, the market will need some time to play around 1.09, until it finally pushes up toward the 1.10 resistance. On the opposite side, there is also some probability for a short reversal, but not below the 1.08 support.
Important news to watch during the week ahead are:
Euro: HCOB Manufacturing PMI Flash for May for both Germany and Euro Zone, GDP Growth rate final for Q1 for Germany,
USD: Treasury Secretary Yellen speech, FOMC Minutes release, Durable Goods Orders for April, Michigan Consumer Sentiment final for May
Inflation rate in Germany final for April was 2.2% on a yearly basis, without change from the previous post. On a monthly basis, inflation was standing at 0.5%. Core inflation rate in the Euro Zone final for April was 2.7% y/y, in line with market expectations. Inflation was standing at 0.6% on a monthly basis and 2.4% on a yearly basis. GDP Growth rate second estimate for Q1 in the Euro Zone was 0.3% and was in line with the market forecast. The same indicator was standing at 0.4% on a yearly basis. Industrial Production in March in the Euro Zone eased to -1%, much better from the previous post of -6.3%.
The US inflation data made an impact on the USD, which lost some of its value during the week. The highest level reached of the eurusd pair during the week was 1.0896. Still, the currency pair is ending the week modestly below this level. During the whole week the currency pair was in a bullish mood. The RSI reached the level of 67, which is still not clear overbought market side, which leaves some space for the parity of the pair for a move to the higher grounds, until the clear overbought side is reached. Moving averages of 50 and 200 days are still moving as parallel lines, not indicating that actual cross occurred.
During the week the pair was testing 1.08 resistance line, which was clearly breached. However, there has not been strength for a move above the 1.09 line. A breach of 1.08 resistance opens a path for a next resistance at 1.10, however it is questionable at this moment whether the market will have strength to push the currency pair to this level. Based on current charts, the market will need some time to play around 1.09, until it finally pushes up toward the 1.10 resistance. On the opposite side, there is also some probability for a short reversal, but not below the 1.08 support.
Important news to watch during the week ahead are:
Euro: HCOB Manufacturing PMI Flash for May for both Germany and Euro Zone, GDP Growth rate final for Q1 for Germany,
USD: Treasury Secretary Yellen speech, FOMC Minutes release, Durable Goods Orders for April, Michigan Consumer Sentiment final for May
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