Published on May 19, 2023

Daily Analysis For EUR/USD 19-05-2023

EUR/USD Analysis

Economic Events and Scenario for EUR/USD

Economic Events: -

GMT	Event	Impact	Currency
00:01	(United Kingdom) Gfk Consumer Confidence	High	GBP
00:30	(Japan) Core Inflation Rate YoY	Medium	JPY
00:30	(Japan) Inflation Rate MoM	Low	JPY
00:30	(Japan) Inflation Rate YoY	High	JPY
00:30	(Japan) Inflation Rate Ex-Food and Energy YoY	Low	JPY
01:00	(Belgium) Friday after Ascension Day	None	EUR
04:00	(New Zealand) Credit Card Spending YoY	Low	NZD
04:35	(Japan) 3-Month Bill Auction	Low	JPY
05:30	(Japan) Tertiary Industry Index MoM	Low	JPY
07:00	(Germany) PPI YoY	Low	EUR
07:00	(Germany) PPI MoM	Medium	EUR
08:00	(Slovakia) Current Account	Low	EUR
09:00	(Greece) Current Account	Low	EUR
09:00	(Italy) Construction Output YoY	Low	EUR
09:30	(Slovenia) PPI YoY	Low	EUR
10:00	(Slovakia) Unemployment Rate	Low	EUR
11:00	(Spain) Consumer Confidence	Medium	EUR
12:00	(Montenegro) Current Account	Low	EUR
13:30	(Canada) Retail Sales YoY	High	CAD
13:30	(Canada) Retail Sales Ex Autos MoM	High	CAD
13:30	(Canada) Retail Sales MoM	High	CAD
13:45	(United States) Fed Williams Speech	Medium	USD
14:00	(United States) Fed Bowman Speech	Medium	USD
15:55	(Euro Area) ECB Schnabel Speech	Medium	EUR
16:00	(United States) Fed Chair Powell Speech	High	USD
18:00	(United States) Baker Hughes Oil Rig Count	Low	USD
18:00	(United States) Baker Hughes Total Rig Count	Low	USD
20:00	(Euro Area) ECB President Lagarde Speech	Medium	EUR

Today's Scenario: - EUR/USD remains near 1.0770, as bears take a pause at the lowest levels in almost eight weeks during the early morning in Asia. The pair has experienced its largest decline since late April, reflecting the cautious sentiment in the market before an important event this week: Fed Chairman Jerome Powell's speech. The Euro bears are further fueled by concerns over US President Joe Biden's upcoming announcement on Sunday to prevent default, as well as anxieties surrounding the European Central Bank (ECB) Bulletin.

Yesterday, the major currency pair recorded its biggest drop in three weeks, as the US Dollar surged to a two-month high. This rise in the Dollar can be attributed to optimistic Treasury bond yields and increasing expectations of a hawkish stance by the Fed, supported by positive domestic data. The greenback's strength may also be bolstered by hopes that US policymakers will manage to extend the debt ceiling, following recent positive remarks from them.

Buy Scenario: - If the pair manages to recover above 1.0810, it would alleviate the bearish pressure. Additionally, breaking the current downtrend line, currently situated at 1.0850, could negate the existing bearish bias, till we do not advise to buy EUR/USD currency pair.

Sell Scenario: - The EUR/USD pair is currently facing downward pressure, but it has managed to find support above the 1.0750 level. It has recently dropped below the 100-day Simple Moving Average (SMA), a significant event as it hasn't occurred since November. Although the overall trend is bearish, it is important to exercise caution as there is potential for a corrective upward movement without altering the dominant bias.

Analyzing the 4-hour chart, technical indicators indicate extremely oversold conditions. The Relative Strength Index (RSI) is well below 30. If the pair remains below 1.0780, it is likely to retest the support level at 1.0750. This level is robust and could lead to a bounce before another downward move. The next support level below 1.0750 is identified at 1.0710. Till then we do not advise selling EUR/USD.

Support and Resistance Level: -