Forex News

EUR/USD Gains Ground Despite US Dollar Selling Pressure, Key Data Releases in Focus

Published by
Nonhlanhla P Dube
  • EUR/USD has gained ground and climbed towards the 1.0960 level on Tuesday despite two consecutive days of pullbacks and increasing selling pressure on the US dollar.
  • Investors are focused on a range of key data releases, including Germany and the Eurozone’s Economic Sentiment figures and trade balance data, which could provide crucial insights into the health of the European economy and the potential for further rate hikes by the European Central Bank (ECB).
  • The divergence between the ECB and the US Federal Reserve regarding their interest rate policy is likely to remain a key driver of EUR/USD price action in the coming weeks.

EUR/USD has climbed towards the 1.0960 level on Tuesday, buoyed by fresh buying interest. The single currency has managed to gain ground despite two consecutive days of pullbacks, with selling pressure surrounding the US dollar increasing. Investors are now focused on a range of key data releases, with Germany and the Eurozone set to reveal their Economic Sentiment figures and trade balance data respectively. These releases could provide crucial insights into the health of the European economy and the potential for further rate hikes by the European Central Bank (ECB).

The ECB has hinted at further tightening in May, with some policymakers suggesting a rate hike of 25 basis points. However, this view is not unanimous, and some have left the door open for a larger increase. Meanwhile, the divergence between the ECB and the US Federal Reserve regarding their interest rate policy is likely to remain a key driver of EUR/USD price action in the coming weeks.

In the US, traders are keeping a close eye on the housing market data, which could impact the performance of the US dollar. The speech by FOMC’s M. Bowman is also likely to be closely watched by investors.

Looking ahead, hawkish ECB-speak continues to support the case for further rate hikes, but concerns remain over the loss of momentum in economic fundamentals across the Eurozone. As such, the focus is on a range of key events in the euro area this week, including the EMU Final Inflation Rate, the ECB Accounts, and the Advanced Manufacturing/Services PMIs.

Traders are also keeping a close eye on a range of issues, including the continuation of the ECB hiking cycle, the impact of the Russia-Ukraine war on inflation, and the risk of inflation becoming entrenched. EUR/USD is currently up by 0.34% at 1.0960, and a break above 1.1075 (2023 high April 14) could see the pair target 1.1100 (round level) en route to 1.1184 (weekly high March 21, 2022). On the downside, the next support levels are at 1.0831 (monthly low April 10), followed by 1.0788 (monthly low April 3), and finally, 1.0756 (55-day SMA)

Nonhlanhla P Dube

Nonhlanhla P Dube is a senior news reporter at Rateweb. Nonhlanhla is a student of International Relations at the University of South Africa. She reports primarily on personal finance and economics. You can contact her directly by email at nonhlanhla@rateweb.co.za

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Published by
Nonhlanhla P Dube

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