Eur/usd - page 257
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EUR/USD is testing the resistance level 1.0900 more than once today and still failed to break over it.
EUR/USD: Euro Reduces Pressure After Reaching 3-Week High
The EUR/USD pair was seen elevated on Monday, however stepped down from the new three-week high amid a slightly softer update from the US services sector, while Greece remained the hot topic ahead of the Federal Reserve meeting tomorrow.
The euro currency was trading with minor gains against the greenback Monday, after stepping down from its three-week high reached shortly after bulls digested a fresh services PMI update. Meanwhile, investors shifted attention to the upcoming Federal Reserve (Fed) meeting, as it could provide further hints regarding the anticipated rate hike later in 2015.
"Any sense from the Fed that a rate hike appears on a further horizon could mean a weaker US currency above levels like $1.10 versus the euro," Western Union Business Solutions senior market analyst Joe Manimbo mentioned.
The EUR/USD cross added 0.22% to trade at $1.0891, falling from its three-week high at $1.0925 Monday afternoon.
Earlier in the morning, the preliminary services PMI decreased to 57.8 points in April, missing the survey of 59.5, and falling moderately from the seven-month high at 59.2 seen previously.
Meanwhile in Greece, Prime Minister Alexis Tsipras changed the representative responsible for negotiations with the International Monetary Fund and the European Union, choosing Deputy Foreign Minister Euclid Tsakalotos as co-coordinator of the group.
"Tsipras reshuffling the bailout negotiating team has given the euro a bit of a boost," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington.
"There was probably a view that Varoufakis was an obstacle to concessions on the Greece end. At the margin, this increases the hope for some positive developments from the Greece-EU debt negotiations."
On Friday, as widely expected, Greece and its international creditors failed to reached an agreement at the meeting in Riga, with no sign of an agreement even imminent "which in itself is a concern, given that there appears to be no Plan B, in the increasingly likely event of a Greece default, in the coming weeks," Michael Hewson from CMC Markets said in a note.
However, German Chancellor Angela Merkel and Greek Prime Minister Alexis Tsipras agreed on Sunday to maintain regular contact during ongoing talks between Athens and its creditors to reach a debt deal.
EUR/USD: Euro Hovers Near 3-Week High $1.09
Although the primary focus of the upcoming European session will shift to the UK and it's preliminary Q1 GDP figures, the developments surrounding Greece remain in headlines.
The Greek government needs to find around €1 billion for salaries and pensions this week, as well as around €200 million by the end of the week for the IMF.
Greek Prime Minister Alexis Tsipras moved his Finance Minister Yanis Varoufakis out of the line of fire of EU finance ministers, who showed their irritation and frustration with him at Friday’s finance ministers meeting in Riga, accusing him of being obstructive in terms of process. Deputy Foreign Minister Tsakalotos is taking over Varoufakis's position as coordinator of the negotiation teams, but Varoufakis will remain the formal head of the team.
The euro jumped to three-week highs against the greenback, following soft US PMI figures, which prompted USD selling across the board. Ahead of the European open the EUR/USD was virtually flat at $1.0887.
Apart from the UK figures, the US will attract traders focus with the latest two day Federal Reserve (Fed) rate meeting getting under way today.
"The continued softness of US data is likely to increase the interest in this week’s FOMC meeting, with the focus likely to be on whether Fed officials believe the current soft patch is transitory, particularly if this week’s Q1 GDP number comes in below 1%," Michael Hewson from CMC Markets UK wrote on Monday.
"Markets continue to liquidate long USD positions in the lead up to the FOMC, as markets price a dovish tilt from the FOMC, should it occur. However, with both the Markit services and manufacturing PMI indicating April remains slow, markets will remain cautious over the USD," ANZ wrote in a research note on Tuesday.
A number of Fed officials in recent days have tempered expectations of an imminent move on the interest rate frontin light of this weaker tone, particularly given the weakness seen on the consumer side.
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On yesterday session EURUSD initially fell but found enough support at 1.0816 to turn around and close in the green in the middle of the daily range, creating a doji candle. The pair changed from a bearish to a recovery phase. Stochastic is showing an overbought market but even with the pair well into overbought territory, we should not fight the strong upward correction just yet.
Unemployment in France Hits Record High
The number of unemployed workers in France reached a record high in March, reversing a timid decline recorded at the start of this year and stoking fears of more problems in the troubled French economy.
In another political blow to France's President François Hollande, who had made reducing unemployment his number one priority before elections in 2017, the number of registered unemployed in France has reached a new record high in March.
The number of category A job seekers defined as registered workers who are fully unemployed, added 0.4% in March from February to 3,509,800, fresh figures from the French labor ministry showed. The previous record was reported in December at 3,500,700 unemployed.
Moreover, the monthly figures show that youth unemployment continues to be a major challenge as the number of job seekers in the age category under 25 rose 1%, the biggest jump in any age category.
Persisting problem
The Hollande government has tried to deal with the problem, including measures to sponsor jobs for young people, tax cuts for employers to encourage recruitment and an incentive scheme for young people taking low paid jobs, but with limited impact.
According to analysts, the recent numbers are not surprising at all given the sluggish economic growth.
French Premier Manuel Valls estimates that a major decline in unemployment will occur if economic output hits around 1.5%, a threshold that he expects to be achieved as soon as this year.
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EUR/USD had a nice break over 1.090 and target 1.100.
On yesterday session the EURUSD rose yet again on a wide range candle and closed near the high of the day suggesting the continuation of the bullish momentum. Although today we will have the Fed interest rate decision and the US preliminary GDP that can change traders mind set. Look out for the strong resistances at 1.1034 and 1.1097 and how the price will react to them.
EUR/USD: Pair Tests $1.10, Dollar Selling Continues
The greenback continued its demise on Wednesday and the EUR/USD pair was testing the essential $1.10 resistance ahead of the Federal Open Market Committee (FOMC) meeting, which concludes today.
Traders have been exiting their long dollar positions since the beginning of the week and the dollar was trading broadly lower on currency markets.
The Federal Reserve (Fed) should confirm the neutral stance and keep the "data-dependent" language, while traders are underpricing September's rate hike. US macro figures have surprised negatively in the previous weeks, which caused some uncertainty ahead of the meeting as the central bank might sound more dovish.
On Monday, soft US PMI figures prompted USD selling across the board, with the depreciation continuing after consumer confidence fell to 95.2 points for April, down from 101.3 previously, while it was expected to climb to 102.2 points.
"The dollar sell-off probably also reflects positioning ahead of the FOMC statement this evening. While understandable, we do not expect the statement to change in any notable way from the statement released after the March meeting. In March, economic growth was said to have "moderated somewhat" - we may see that description changed to "moderated further" but beyond small tweaks like this, we see little change. In fact, when you consider that crude oil prices have increased by about 30% from the low in March and that we’ve had an inflation report that revealed higher than expected core inflation, there are some grounds for the FOMC to express greater confidence in inflation returning toward the 2.0% level," Bank of Tokyo-Mitsubishi said.
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German inflation rises 0.4% in April
Consumer price inflation in Germany increased broadly in line with market expectations in April, easing concerns over the risk of deflation in the euro area, official preliminary data showed on Wednesday.
In a report, the German Federal Statistics Bureau said consumer price inflation accelerated at an annualized rate of 0.4% this month, meeting forecasts and compared to a reading of 0.3% in March.
Month-over-month, German consumer prices dipped 0.1% in April, also in line with expectations, after climbing 0.5% in the preceding month.
EUR/USD was trading at 1.0993 from around 1.0996 ahead of the release of the data, while EUR/GBP was at 0.7160 from 0.7163 earlier.
Meanwhile, European stock markets were broadly lower. Germany's DAX shed 0.4%, the EURO STOXX 50 fell 0.5%, France’s CAC 40 dipped 0.6%, while London’s FTSE 100 declined 0.25%.
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Today is a big day with the US Interest rate decision and the FOMC statement.