After hitting a low of 1.0355 on Thursday, the EUR/USD pair is slowly rising. Le currency pair has continued its losses after breaking a somewhat more extensive consolidation range of 1.0471-1.0642 from April’s previous week.
The EUR/USD pair is now trading a few pips over 1.0400, but the daily chart implies the pair may yet tumble. After a period of consolidation, the couple has finally found direction, with technical indications pointing downward around oversold levels. But it also develops far below bearish moving averages, indicating vigorous selling activity.
The pair fell to 1.0388 ahead of the US Open, with little sign of recovery. Global indices are down, and demand for government bonds has driven rates down. The 10-year US Treasury yields 2.83 per cent.
Tensions between Russia and the West are rising. Russian Deputy Chairman Dmitry Medvedev warned that military aid to Ukraine might spark a Russian-NATO clash. Meanwhile, Ukraine has suspended Gazprom gas transit via its borders.
Although the US announced 203K higher than expected Initial Jobless Claims for the week ended May 6, the Producer Price Index rose 11% YoY in April, above the 10.7% predicted but below the prior 11.2%, indicating broad-based inflation.
Statistisches Bundesamt Deutschland will also report the Producer Price Index on May 20, 2022. Economists forecast PPI to stay at 3.7 per cent in April, down from 4.9 per cent in March.
PPI changes indicate commodities inflation. A high rating is optimistic for the EUR, whilst a low value is bearish (or bearish).
The EUR/USD concluded the week at 1.0560, close to the year-to-date low of 1.0470. The pair reversed some of its earlier weekly losses but remains negative.