EUR/USD Clings To Weekly Gains As Momentum Fades
2022.05.27 10:31
The EUR/USD pair advanced on Thursday, reversing the previous day’s pullback amid rising stocks despite the increase in Treasury yields. The risk-on mood prevailed, keeping the US dollar under pressure and favoring a retest of the 1.0730 area.
The dollar came under mild pressure following the release of the Federal Reserve’s last meeting minutes on Wednesday. The minutes showed FOMC members bracing for two more 50 basis point rate hikes but deemed less hawkish than expected.
On Thursday, the US published the Q1 GDP data, which showed the economy contracted by 1.5% annualized, more than the preliminary estimate of a 1.4% shrink. The economic calendar will feature U.S. Personal Income and Spending and the closely-watched Core PCE Price Index on Friday.
According to indicators on the daily chart, the EUR/USD holds a short-term bullish bias. However, the pair is losing bullish momentum, and the upside remains well limited by the 1.0750 area.
EUR/USD daily chart.
The RSI has turned flat but hovers above its midline, while the MACD remains in positive territory but signals decreasing upward momentum.
If the EUR/USD breaks above the 1.0750 resistance area, the next resistance level is seen at a descending trendline coming from February highs, currently at 1.0810.
On the other hand, immediate support could be found at the 1.0700 mark. Loss of this level could add pressure on the EUR/USD pair and send it to test the weekly low of 1.0640, exposing the 1.0600 area.
