Daily Analysis For EUR/USD  18-05-2023

Daily Analysis For EUR/USD 18-05-2023

EUR/USD Analysis
Economic Events and Scenario for EUR/USD
Economic Events: -
00:50(Japan) Foreign Bond InvestmentLowJPY
00:50(Japan) Stock Investment by ForeignersLowJPY
00:50(Japan) Imports YoYLowJPY
00:50(Japan) Exports YoYMediumJPY
00:50(Japan) Balance of TradeHighJPY
01:00(Austria) Ascension DayNoneEUR
01:00(Belgium) Ascension DayNoneEUR
01:00(Euro Area) Ascension DayNoneEUR
01:00(Finland) Ascension DayNoneEUR
01:00(France) Ascension DayNoneEUR
01:00(Germany) Ascension DayNoneEUR
01:00(Luxembourg) Ascension DayNoneEUR
01:00(Netherlands) Ascension DayNoneEUR
01:00(Switzerland) Ascension DayNoneCHF
02:30(Australia) Part Time Employment ChgMediumAUD
02:30(Australia) Participation RateLowAUD
02:30(Australia) Full Time Employment ChgMediumAUD
02:30(Australia) Unemployment RateHighAUD
02:30(Australia) Employment ChangeHighAUD
04:00(East Timor) Inflation Rate YoYLowUSD
04:00(East Timor) Inflation Rate MoMLowUSD
04:35(Japan) 52-Week Bill AuctionLowJPY
07:30(Euro Area) ECB Guindos SpeechHighEUR
09:00(Spain) Balance of TradeMediumEUR
09:40(Spain) Obligacion AuctionLowEUR
09:40(Spain) 5-Year Bonos AuctionLowEUR
10:00(Euro Area) ECB President Lagarde SpeechMediumEUR
11:00(Portugal) PPI MoMLowEUR
11:00(Portugal) PPI YoYLowEUR
11:00(Slovakia) Unemployment RateLowEUR
11:30(Portugal) Private Consumption YoYLowEUR
11:30(Portugal) Economic Activity YoYLowEUR
13:30(United States) Philadelphia Fed Manufacturing IndexMediumUSD
13:30(United States) Philly Fed Business ConditionsLowUSD
13:30(United States) Philly Fed CAPEX IndexLowUSD
13:30(United States) Philly Fed EmploymentLowUSD
13:30(United States) Philly Fed New OrdersLowUSD
13:30(United States) Philly Fed Prices PaidLowUSD
13:30(United States) Initial Jobless ClaimsHighUSD
13:30(United States) Jobless Claims 4-week AverageHighUSD
13:30(United States) Continuing Jobless ClaimsHighUSD
13:30(Canada) New Housing Price Index YoYMediumCAD
13:30(Canada) New Housing Price Index MoMMediumCAD
14:05(United States) Fed Jefferson SpeechMediumUSD
14:30(United States) Fed Barr TestimonyMediumUSD
15:00(United States) Existing Home Sales MoMHighUSD
15:00(United States) Existing Home SalesHighUSD
15:00(United States) CB Leading Index MoMLowUSD
15:00(United States) Fed Logan SpeechMediumUSD
15:30(United States) EIA Natural Gas Stocks ChangeLowUSD
16:30(United States) 8-Week Bill AuctionLowUSD
16:30(United States) 4-Week Bill AuctionLowUSD
18:00(United States) 10-Year TIPS AuctionLowUSD
20:00(El Salvador) Balance of TradeLowUSD
23:45(New Zealand) Balance of TradeMediumNZD
23:45(New Zealand) ExportsLowNZD
23:45(New Zealand) ImportsLowNZD

Today's Scenario: - The EUR/USD pair has experienced a slight recovery from its immediate support level of 1.0835 during the Asian trading session. This major currency pair is expected to gain further momentum as the US Dollar Index (DXY) has pulled back below 102.90 after a brief rebound.
During the Asian session, S&P500 futures recorded marginal losses, indicating a mild sense of caution in the overall market sentiment favoring riskier assets. On Wednesday, US equities witnessed significant buying activity, driven by President Joe Biden's confidence in raising the US debt ceiling. However, this approval is accompanied by a compromise that will result in a higher budget deficit.

Buy Scenario: - The EUR/USD pair is hovering around 1.0840 as the previous day's temporary recovery from a 1.5-month low diminishes in the early hours of Thursday.
Although the Euro pair managed to rebound from the 1.0800 level on Wednesday, supported by the downbeat RSI (14) conditions and the 100-day moving average (DMA), its upward momentum is restrained by a bearish MACD signal and cautious market sentiment ahead of a speech by European Central Bank (ECB) President Christine Lagarde. Additionally, concerns about a potential US default limit the buying interest in the pair.
Therefore, the recovery of the EUR/USD requires confirmation, with the 50-DMA and the support-turned-resistance line, which dates back to September 2022 and is located near 1.0900 at the moment, serving as a key level for further advances.
If the pair manages to surpass this level, it may face resistance near the early May low around 1.0940 and the February high around 1.1035, posing challenges for buyers. Moreover, multiple tops observed in April and May around 1.1090 and 1.1100 can also act as upside barriers, till we do not advise to buy EUR/USD currency pair.

Sell Scenario: - On the downside, a daily close below the 100-DMA near 1.0800 would attract sellers in the EUR/USD pair. In such a scenario, the 23.6% Fibonacci retracement level of the pair's upward movement from September 2022 to April 2023, around 1.0725, could serve as an additional support.
It is important to note that a broad support zone encompassing various levels marked since November 2022, roughly between 1.0520 and 1.0480, presents a formidable obstacle for EUR/USD sellers.
To summarize, despite the recent corrective bounce, the EUR/USD pair is expected to maintain a bearish bias. Till then we do not advise selling EUR/USD.

Support and Resistance Level: -
S1 1.0810-R1 1.0873
S2 1.0778-R2 1.0905
S3 1.0746-R3 1.0936


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