The EURUSD fell again during the trading session on Thursday after forming an inverted hammer on Wednesday, the currency pair plunged to a 5-year low of 1.0425. The strong bearish sentiment is driven by the dollar strength and concerns about the economic fallout from the Ukraine crisis. In the coming days, again the trend of the euro would largely depend on the trend of the dollar index. On the downside, if the bearish momentum continues the next key demand area is to watch at 1.0400 and 1.0380.
Stocks fall further on Wall Street on Wednesday following the release of the latest US inflation data. The data showed the annual Consumer Price Index printing at 8.3 percent, higher than the 8.1 percent predicted. The sell-off is also driven by weaker-than-expected earnings results.
Crude oil prices remain under pressure after the U.S. crude inventories rose by more than anticipated. The EIA data showed US crude oil inventories jumped by 8.487 million barrels in the week ending May 6th.
In the currency market, the US dollar, which is also often seen as the ultimate safe-haven currency, held firm against many other rivals, including the euro and commodity-linked currencies. The US dollar index surged to a fresh session high of 104.50 on Thursday supported by the hotter than expected US inflation data. At the time of writing, the king dollar trades above 104.50.
The safe-haven metal is struggling to firm to the upside despite the economic uncertainties due to aggressive Fed rate hike bets. Overall, the momentum remains bullish throughout this month as inflation pressures persist.
On the data front, the UK's First-quarter GDP grew by 0.8%, missing forecasts for a rise of 1% and down from the 1.3% expansion posted in the fourth quarter of 2021. The annual reading was also below expectations at 8.7% against estimates of 9%.
Moving ahead today, the important events to watch:
US – PPI: GMT – 12.30
US – Jobless claims: GMT – 12.30
Worldwide, more than 517 million people have been confirmed infected and more than 6.25 million have died. The United States has confirmed over 81 million cases and has had more than 997,000 deaths from COVID-19, the highest total in the world.
Technical Outlook and Review
EURUSD: Technically the overall momentum remains bearish, the key support for the Euro stands near the level of 1.0400. On the upside, 1.0480 will act as an immediate and strong hurdle while 1.0530 will be a critical resistance zone because above this, bulls are likely to dominate.
The important levels to watch for today: Support- 1.0400 and 1.0360 Resistance- 1.0480 and 1.0530.
GOLD: On the daily time frame, the gold is currently supported at $1830, and the resistance is around $1872. On the upper side, the long-term buyers should wait for a daily close above the $1895.
The important levels to watch for today: Support- 1840 and 1830 Resistance- 1865 and 1872.
Quote of the day - “If you can learn to create a state of mind that is not affected by the market’s behaviour, the struggle will cease to exist.” – Mark Douglas.