Yahoo Finance EURUSD Hits New Lows Post Bearish Eurozone PMI Data
The EURUSD pair has been on a bearish decline since Wednesday’s Asian hours, however the pair hit new lows during American market hours owing to worse than expected PMI data across Eurozone, France and German markets. The pair continued to move downtrend and hit new 6 month low at 1.1675 post FOMC minutes update. While the pair did make some headway from lowest point of the day, there wasn’t any significant change in price movement as the pair moved into Thursday’s Asian market hours trading around 1.16 price handle.
EURUSD Under the Pump
The euro was already weak in the market amid political uncertainty in the Eurozone. Guiseppe Conte received a mandate from Italy’s president to become Prime Minister. He is the candidate of the anti-establishment parties League and Five Star Movement. While the US dollar value did see some pull back owing to mixed macroeconomic readings the greenback didn’t lose much against Euro as PMI data in US market was bullish and Fed rate hike remains steady after FOMC minutes as many members mentioned that rate hike is likely to be soon.
The growing momentum in the U.S. economy and renewed stability in American equities has left traders confident of multiple rate hikes by US Fed this year. Since 2016 there has been over six rate hikes and two more rate hikes are predicted by investors within this year with a 25 basis point increase in the Fed’s next meeting in June is already fully priced in, however some analysts believe that current string economic conditions and rising inflation rate in US will force the policy makers to add another rate hike along with already expected rate hikes leading to a total of three rate hikes within 2018.
DXY consolidated gains post FOMC minutes update holding near 94. Euro is expected to move around 1.16 price handle during Asian market hours, however macro calendar has busy schedule for both US and Eurozone with release of German GDP, ECB publishing its account of monetary policy meeting and home sales data release for US markets. A positive outcome in ECB minutes and German GDP could help Euro make modest gains against Greenback during today’s trading session while a bearish reading could likely push the pair to test 1.1600 price range which would open possibility for further decline in price up to 1.14 handle. Expected support and resistance for the pair are at 1.1660 / 1.1630 and 1.1719 / 1.1741 respectively.
This article was originally posted on FX Empire
