Published on May 22, 2023

Daily Analysis For EUR/USD 22-05-2023

EUR/USD Analysis

Economic Events and Scenario for EUR/USD

Economic Events: -

GMT	Event	Impact	Currency
00:50	(Japan) Machinery Orders YoY	Medium	JPY
00:50	(Japan) Machinery Orders MoM	Medium	JPY
01:00	(Canada) Victoria Day	None	CAD
01:00	(Montenegro) Independence Day	None	EUR
02:15	(China) Loan Prime Rate 1Y	Medium	CNY
02:15	(China) Loan Prime Rate 5Y	Medium	CNY
05:30	(Netherlands) Consumer Confidence	Medium	EUR
06:00	(Estonia) PPI YoY	Low	EUR
06:00	(Estonia) PPI MoM	Low	EUR
07:30	(Switzerland) Industrial Production YoY	Medium	CHF
08:00	(Slovakia) Current Account	Low	EUR
09:00	(Greece) Current Account	Low	EUR
09:00	(Australia) Myfxbook AUDUSD Sentiment	Medium	AUD
09:00	(Switzerland) Myfxbook USDCHF Sentiment	Medium	CHF
09:00	(Japan) Myfxbook USDJPY Sentiment	Medium	JPY
09:00	(European Union) Myfxbook EURUSD Sentiment	Medium	EUR
09:00	(United Kingdom) Myfxbook GBPUSD Sentiment	Medium	GBP
09:00	(Canada) Myfxbook USDCAD Sentiment	Medium	CAD
09:00	(New Zealand) Myfxbook NZDUSD Sentiment	Medium	NZD
10:00	(Belgium) Consumer Confidence	Low	EUR
10:00	(Euro Area) Construction Output YoY	Low	EUR
10:45	(European Union) EU Bond Auction	Low	EUR
11:00	(Ireland) Wholesale Prices MoM	Low	EUR
11:00	(Ireland) Wholesale Prices YoY	Low	EUR
11:00	(Luxembourg) Unemployment Rate	Low	EUR
11:30	(Portugal) Current Account	Low	EUR
13:00	(Kosovo) Balance of Trade	Low	EUR
13:30	(United States) Fed Bullard Speech	Medium	USD
14:00	(France) 3-Month BTF Auction	Low	EUR
14:00	(France) 12-Month BTF Auction	Low	EUR
14:00	(France) 6-Month BTF Auction	Low	EUR
15:00	(Euro Area) Consumer Confidence	Medium	EUR
15:50	(United States) Fed Barkin Speech	Medium	USD
15:50	(United States) Fed Bostic Speech	Medium	USD
16:30	(United States) 3-Month Bill Auction	Low	USD
16:30	(United States) 6-Month Bill Auction	Low	USD
20:00	(El Salvador) Balance of Trade	Low	USD

Today's Scenario: - The EUR/USD pair has experienced a significant rebound after reaching a crucial support level near 1.0800 during the early Tokyo session. Despite the lack of progress in the US debt-ceiling negotiations over the weekend, the major currency pair has demonstrated resilience around the 1.0800 mark.

In an effort to reach a bipartisan agreement, US President Joe Biden and House of Representatives Joseph McCarthy are scheduled to meet on Monday. The aim is to find common ground, as the previous terms proposed by Republicans were deemed "unacceptable" by the White House. It is worth noting that the White House is not inclined to reduce the entire budget spending by 8%.

Buy Scenario: - EUR/USD buyers remain in control as they maintain the upper hand around the intraday high of approximately 1.0825-30 during the Asian session on Monday. This positive momentum is driven by the break above the 100-day moving average (DMA), marking a recovery from the lowest levels seen in eight weeks. The currency pair is now approaching the upper trendline of a descending channel that has been in place for the past two weeks.

Notably, the rebound of the 14-day relative strength index (RSI) from near oversold levels, coupled with the sustained break above the 100-DMA, provides further encouragement for Euro buyers.

To regain full control, the bulls need to convincingly break above the upper resistance line of the bearish channel, which is close to 1.0860.

However, there are several obstacles ahead for EUR/USD buyers, with resistance levels around 1.0920 and 1.1000 before reaching February's high at 1.1033. It should be noted that surpassing the region of 1.1095-1100 is likely to be challenging for Euro bulls beyond the 1.1033 level, till we do not advise to buy EUR/USD currency pair.

Sell Scenario: - On the other hand, EUR/USD sellers may wait for a clear breach of the 100-DMA support near 1.0800 before entering new positions.

In such a scenario, the pair's downside could find support around the 50% Fibonacci retracement level of the January-April rally, near 1.0790.

However, the critical support to monitor for EUR/USD sellers lies at the convergence of the lower boundary of the aforementioned channel and the 61.8% Fibonacci retracement level, around 1.0720-15. Till then we do not advise selling EUR/USD.

Support and Resistance Level: -