EUR/USD Rebounds From 2-Month Low, Struggles Below 1.0800
Alex Boltyan | May 19, 2023 10:27AM ET
The EUR/USD pair managed to regain some of the lost ground on Friday after sliding to its lowest level in nearly two months earlier on the day.
At the time of writing, the EUR/USD pair is trading at the 1.0795 area, up 0.24% on the day, but on track to print a 0.49% weekly loss.
A slight improvement in market mood, a technical correction and week-end profit-taking have helped the EUR/USD to trim losses and bounce toward the 1.0800 area.
Optimism surrounding the US debt-ceiling negotiations has been the main driver amid hopes that US policymakers could strike a deal in the next few days, avoiding a catastrophic default.
Meanwhile, the European Central Bank (ECB) Economic Bulletin noted that price pressures remain strong while wage pressures have strengthened, further fueling expectations that the central bank will have no choice but to keep raising rates.
Across the pond, Federal Reserve President Jerome Powell will participate in the "Perspectives on Monetary Policy" panel before the Thomas Laubach Research Conference hosted by the Fed. His words will be closely watched by investors looking for clues on the Fed's next move.
From a technical perspective, the EUR/USD holds a negative short-term bias, according to indicators on the daily chart. On the weekly chart, however, the bearish outlook is not quite clear, as indicators hover above their midlines, although gaining downward slopes.
The negative perspective has strengthened since the EUR/USD pair lost simultaneously support from the 1.0800 psychological level and the 100-day simple moving average (SMA), hitting fresh two-month lows at 1.0760. Loss of the latter would target the 1.0700 psychological area.
On the other hand, recovering the 1.0800 area could ease the immediate pressure on the EUR/USD, putting the 1.0900 back on buyers' radar.
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