EURUSD Analysis
| Performance after Tuesday | |||||
| Period | Pct | Chg | Momentum | ||
| Tuesday | 0.35% | 39.1 Pips |  |
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| Week to-date | 1.07% | 119 Pips |  |
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| May | -0.37% | -42.3 Pips |  |
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Upcoming key events (London Time)
Thu 01:00 AM EUR G7 Meeting
Thu 08:30 AM EUR HCOB Composite PMI Thu 08:30 AM EUR HCOB Manufacturing PMI Thu 08:30 AM EUR HCOB Services PMI Thu 09:00 AM EUR HCOB Eurozone Composite PMI Thu 09:00 AM EUR HCOB Eurozone Manufacturing PMI Thu 09:00 AM EUR HCOB Eurozone Services PMI
What happened lately
The economic data indicates a general improvement within the Euro Area and Germany, although not without some concerning aspects. The Euro Area Consumer Confidence Indicator has shown progress by rising to -15.2 points in May from -16.7 points in April, suggesting improving sentiment among consumers. Simultaneously, price stability is evident with the Core Harmonized Index of Consumer Prices (HICP) and the overall HICP both remaining unchanged in April. The Core HICP was steady at 2.7%, aligning with the previous month’s figures, which implies that core inflation pressures remain manageable.
In Germany, the Producer Price Index (PPI) on a monthly basis slightly improved by rising to -0.6% from -0.7% in March. However, on an annual basis, the Producer Prices Index showed a concerning drop to -0.9% from -0.2%, pointing to potential deflationary pressures within the manufacturing sector. Persistent downward movement in producer prices could signify weak demand or oversupply in the market, which could have broader implications for economic health if not addressed.
The recent data releases seem to have a mixed impact on the EURUSD currency pair. With an uptick observed on Tuesday, the EURUSD increased by 0.35% to settle at 1.12822 amidst reports of mixed economic indicators. The steady consumer price index and consumer confidence improvement in the Euro Area could give EUR support, promising stability. Meanwhile, Germany’s declining yearly producer prices hint at underlying economic challenges that could weigh on the euro. Therefore, the market seems to be in consolidation, anticipating further cues from upcoming significant events such as the G7 meeting, Eurozone PMI data releases, and other economic indicators scheduled later in the week. These events could provide fresh impetus for the currency’s movement, with the potential to solidify support if the data aligns favorably with economic recovery projections.
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What can we expect from EURUSD today?
EURUSD on Tuesday rose 0.35% to 1.12822. Price is above 9-Day EMA while Stochastic is rising.
Updated daily direction for EURUSD looks mixed as the pair is likely to consolidate above 1.1238 (S1).
Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 1.12858 or trades above daily pivot 1.12619. Break above could target R1 at 1.13061. While to the downside, we are looking at 1.1238 (S1) and daily low of 1.12177 as support levels. EURUSD need to break on either side to indicate a short-term bias. A break above 1.12858 may suggest continuation after recent positive movement.
For the week to-date, take note that EURUSD is bullish as the pair continued to trade higher and is up by 1.07% over the past few days.
Key levels to watch out:
| R3 | 1.13742 |
| R2 | 1.133 |
| R1 | 1.13061 |
| Daily Pivot | 1.12619 |
| S1 | 1.1238 |
| S2 | 1.11938 |
| S3 | 1.11699 |
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