The US Department of Commerce reported a 0.7% MoM drop in orders.The EUR/USD edges above the 1.0900 figure for the second consecutive day after data from the United States (US) shifted expectations that the US Federal Reserve (Fed) would pause its tightening cycle. At the time of writing, the EUR/USD is trading at 1.0947 after hitting a low of 1.0882.
EUR/USD rises above 1.0900 as bad US economic data turns negative for the US Dollar.Sentiment shifted sour as of late after a round of labor market data in the US has shown signs of cooling down. Job openings in February, reported in the JOLTs reports, dropped from 10.4 million to 9.931 million, a drop of 32,000. This could be a prelude that the labor market is cooling. Further data will be revealed during the week, with ADP Employment figures shown on Wednesday, followed by Initial Jobless Claims and the US Nonfarm Payrolls report.
At the same time, Factory Orders in the US dropped for the second straight month. Orders plummeted 0.7% MoM, worst than the estimated 0.5% decrease, as the US Department of Commerce reported.
Investors expect a pause on the Fed’s May meeting.Of late, traders see a 57% probability of a Fed pause at the May 2-3 meeting vs. a 43% chance the day before. investors forecast a 43% chance of a 25 bps rate hike while estimating two rate cuts by the year’s end.
The EUR/USD rose from 1.0886 towards 1.0973, its daily high, before stabilizing at around 1.0947, sponsored by broad US Dollar weakness. The US Dollar Index, which tracks the value of a basket of six currencies vs. the American Dollar (USD), falls 0.41%, at 101.628, blamed on falling US T-bond yields.
On the European front, the Producer Price Index (PPI) for February continued its downward trend, while the German Balance of Trader for the same period remained flat at €16B. In the meantime, the European Central Bank (ECB) Governing Council member, Gabriel Makhlouf, said that the impact of higher borrowing costs is “well underway.” He added that the ECB must remain steadfast and ready to act as required” to ensure inflation returns to target over the medium-term.
EUR/USD Technical analysis
From a daily chart perspective, the EUR/USD triplet bottom remains in play, targeting 1.1000. On Monday, the EUR/USD dipped and tested the 20-day EMA at 1.0788 before skyrocketing above 1.0900. That exacerbated a continuation of the uptrend and has opened the door for further upside. The EUR/USD first resistance would be 1.0973, followed by 1.1000, and then the YTD high at 1.1033. On the other hand, the EUR/USD first support would be 1.0900, followed by the 20-day EMA At 1.0788.
EUR/USD consolidates around 1.0950, heads for the highest close in two months
EUR/USD reached its highest level since early February at 1.0972 and then pulled back modestly to settle around 1.0950. The Euro is on its way to the highest close in two months, as it looks at the 1.1000 mark, ahead of crucial US economic data.
GBP/USD tests 1.2500 after disappointing US data
GBP/USD has gained traction and climbed to the 1.2500 after having met resistance at that level earlier in the day. The US Dollar is having a difficult time finding demand after weaker-than-expected macroeconomic data releases, helping the pair stretch higher.
Gold: XAU/USD on its way to challenge record highs
Spot gold soared on Tuesday on the back of broad US Dollar weakness and approaches all-time highs in the $2,075 a troy ounce price zone.
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