EUR/USD: Bulls lack conviction above 1.0400

EUR/USD trims initial gains beyond the 1.0400 mark on Friday.

German 10y Bund yields reverse part of the recent decline.EMU Industrial Production contracted less than expected in March.

The better sentiment in the risk-linked complex helped EUR/USD regain some poise and retake the 1.0400 hurdle and beyond earlier on Friday.

EUR/USD could still visit 1.0340

Despite the current bullish attempt, price action around EUR/USD keeps pointing to the likeliness of a deeper pullback in the short-term horizon and with the immediate target at the 2017 low at 1.0340 (January 3).

As usual, the negative stance in the pair follows the constructive perspective around the greenback, always against the backdrop of the tighter normalization of the Fed’s monetary conditions in the next months.

Friday’s improvement in the European currency also echoes in the German 10y Bund yields, which manage to return to the positive territory after four consecutive daily retracements.

In the domestic calendar, Industrial Production in the broader Euroland contracted at a monthly 1.8% in March and 0.8% over the last twelve months. Later in the NA session, the preliminary U-Mich Consumer Sentiment for the current month is due seconded by the speech by Fed’s Kashkari.

What to look for around EUR

EUR/USD battles to retake the 1.0400 mark on a convincing fashion amidst the recent worsening of the risk trends, while the outlook for the single currency remains entrenched into the negative view for the time being. As usual, price action in spot should reflect dollar dynamics, geopolitical concerns and the Fed-ECB divergence. Occasional pockets of strength in the single currency, in the meantime, should appear reinforced by firmer speculation the ECB could raise rates at some point in the summer, while higher German yields, elevated inflation and a decent pace of the economic recovery in the region are also supportive of an improvement in the mood around the euro.

EUR/USD struggels to hold above 1.0400 after EU data

EUR/USD has retreated below 1.0400 with the dollar regathering its strength on rising US Treasury bond yields. Eurostat reported that Industrial Production in the EU contracted at a softer pace than expected in March but the shared currency failed to capitalise on that data. Investors await the consumer confidence report from the US.


GBP/USD retreats below 1.2200 as dollar gathers strength

GBP/USD has lost its traction following a short-lived recovery attempt and dropped below 1.2200. Ahead of the consumer confidence index data from the US, rising US Treasury bond yields help the greenback find demand and weigh on the pair. 


Gold struggles near multi-month low, flat-lined around $1,820 area

Gold reversed an intraday dip to the $1,810 region and staged modest recovery from over a three-month low touched earlier this Friday. The intraday uptick, however, lacked any follow-through and remained capped below the $1,830 level. 

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