- EUR/USD off weekly lows but still down for the week.
- ECB announced the end of the purchase program on Thursday and next week the Fed is expected to raise rates.
The EUR/USD pair dropped sharply on Friday, breaking below 1.1300 and bottomed at 1.2666, the lowest in two weeks. Late during the US session, the greenback lost strength and rose back to the 1.1300 area.
Despite rising back to 1.1300, the euro still heads for the lowest weekly close since June 2017. During the week, it failed to hold on top of the 20-day moving average at 1.1350/60 and on Friday, weakened significantly, affected by EZ economic data and a stronger US dollar.
The pair dropped to the next strong support at 1.1260/70 that capped the downside. Still, the pressure is biased to the downside, but eased late on Friday. The bounce on top of 1.1300 could sign more consolidation ahead, between 1.1300 and 1.1400.
Week ahead
On Thursday, the European Central Bank kept rates unchanged as expected and announced the end of the asset purchase program. The short-term inflation and growth outlook was dovish and pressured the euro modestly to the downside.
Next week, on Wednesday, the Fed is expected to announce a rate hike of 25bp. “The big question is what the Fed will signal going forward, as many have interpreted recent Fed speeches by Powell and Clarida dovishly. While the Fed will probably highlight that risks to the rate outlook are becoming more two-sided, as we approach the range of the neutral rate (2.5-3.0%) estimates according to the individual FOMC members, do not be surprised if the Fed removes the sentence that it ‘expects further gradual increases in the target range’,” said analysts at Danske Bank.
Regarding data, inflation numbers are due in the Eurozone and in the US housing data and another estimate of Q3 GDP.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD trades weak below 1.0800 amid Good Friday lull, ahead of US PCE
EUR/USD continues its downward trend for the fourth consecutive day, driven by a stronger US Dollar influenced by the hawkish market sentiment surrounding the Federal Reserve and expectations of prolonged higher interest rates.
GBP/USD: The first downside target is seen at the 1.2600–1.2605 zone
GBP/USD trades on a weaker note around 1.2620 during the early European session on Friday. The decline of Pound Sterling is backed by the growing speculation that the Bank of England will begin the rate-cut cycle this year.
Gold ends Q1 2024 at record highs, what’s next?
Gold is sitting at an all-time high of $2,236, lacking a trading impetus amid holiday-thinned conditions on Good Friday. Most major world markets, including the United States are closed in observance of Holy Friday, leaving volatility around Gold price highly subdued.
Ripple's move above this key level could trigger nearly 50% rally for XRP
Ripple price has overcome a critical resistance level and flipped into a support floor on the weekly time frame. This development happened while XRP tightly consolidated for roughly 250 days.
US core PCE inflation set to ease in February on month as Federal Reserve rate cut bets for June mount
The core Personal Consumption Expenditures Price Index is set to rise 0.3% MoM and 2.8% YoY in February. The revised Summary of Projections showed that policymakers upwardly revised end-2024 core PCE forecast to 2.6% from 2.4%.