EUR/USD Recovery Falters at 1.0900, Maintains Short-Term Negative Bias
Alex Boltyan | May 16, 2023 11:24AM ET
The EUR/USD pair staged a short-lived bounce on Tuesday, but it was rejected from the 1.0900 area despite encouraging Eurozone Gross Domestic Product (GDP) figures.
At the time of writing, the EUR/USD pair is trading at the 1.0865 zone, a few pips below its opening price, after hitting an intraday high of 1.0904.
The Eurozone released the preliminary first-quarter GDP numbers, which showed the bloc's economy grew at an annualized pace of 1.3%, in line with expectations. Additionally, the employment change was +1.7% in the same period.
On the other side of the Atlantic, US retail sales came in below expectations, with the headline figure growing 0.4% in April versus the 0.7% increase expected.
Following the release of retail sales, US Treasury yields made a U-turn and now trade with marked gains across the curve, boosting the dollar and weighing on the EUR/USD pair.
From a technical perspective, the EUR/USD short-term bias has turned slightly bearish according to indicators on the daily chart, which have crossed their midlines and stand in negative territory. Furthermore, the price has fallen below the 20-day simple moving average (SMA) and remains unable to reclaim the 1.0900 level, skewing the risk to the downside.
A break above 1.0900 could pave the way toward the 1.1000 zone en route to 2023 highs at the 1.1095 zone. On the flip side, the loss of the 100-day SMA at 1.0800 would deteriorate the short-term scenario, exposing the 1.0750 area.
From a broader perspective, the EUR/USD pair maintains a positive view while above the 200-day SMA, currently at 1.0460.
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