EURUSD Rebounds Under Pressure!

EURUSD Rebounds Under Pressure!

EURUSD Rebounds Under Pressure!

While the possibility of increasing interest rates after the Fed meeting added value to the dollar side, there was a pullback in the parity at a rate of up to 1.1850 level. However, the announcement from Fed Chairman Powell that they would not raise interest rates ahead of inflation fears relieved the markets to some extent. Thus, it can be said that the dissolution of the dollar index caused the sudden declines in the parity to change course.

On the US side, the US economy grew by 6.4 percent in the first quarter. On the other hand, while the weekly unemployment benefit applications decreased by around 411 thousand people compared to the previous month, we saw that the durable goods orders in the country were slightly below the expectations with 2.3 in May. Following these developments, the fact that the horizontal course was maintained on the dollar side did not cause sudden price movements on the parity side.

In the Euro Area, while the manufacturing PMI figure exceeded expectations, no news has yet been reflected on the markets from the European Leaders' Summit, which started yesterday. ECB President Lagarde stated that confidence in the economy increased as the epidemic situation improved, and pointed out that the pressure on prices was significant due to the recovery in domestic demand. On the other hand, ECB officials generally make statements that the increase in inflation is temporary.

In the light of this information, we follow the situation that the returns from the 1850 level in the EURUSD parity accelerate the upward momentum with the closings above the resistance of 1.1950. Above this level, there will be important threshold levels 1.20 and 1.2056 that remain current. However, in a possible resolution, it is useful to consider the 1.830 and 1.1770 support levels in the closing below the 1.1890 level.

GANNMarkets