Mon. May 20th, 2024

EUR/USD DECLINES TOWARD 1.0600 AS UPBEAT US RETAIL SALES IMPROVE US DOLLAR’S APPEAL

EUR/USD DIVES TO FRESH FIVE-MONTH LOWS NEAR 1.0600EUR/USD DIVES TO FRESH FIVE-MONTH LOWS NEAR 1.0600

The EUR/USD pair sees more downside below the immediate support of 1.0620 in Monday’s early American session.

  • EUR/USD is expected to witness more downside as the appeal for the US Dollar strengthens.
  • Fed Daly said there is absolutely no urgency for the Fed to pivot to rate cuts.
  • The ECB is expected to begin reducing interest rates from the June meeting.

The EUR/USD pair sees more downside below the immediate support of 1.0620 in Monday’s early American session.

The major currency pair weakens as robust spending by United States households at retail stores in March has improved the US Dollar’s appeal.

The US Census Bureau reported that monthly Retail Sales grew strongly by 0.7% from expectations of 0.3%. In February, Retail Sales data rose by 0.9%, upwardly revised from 0.6%.

The Retail Sales data is one of leading indicators of consumer spendings, which accounts for more than two-thirds of the US economy. Higher spending by households indicates a stubborn inflation outlook.

Upbeat Retail Sales data would allow Federal Reserve (Fed) policymakers to keep the monetary policy stance restrictive for a longer period.

Fed policymakers have been reiterating the need for maintaining interest rates higher until they get convinced that inflation will return to the desired rate of 2%. San Francisco Fed Bank President Mary Daly said on Friday that there is absolutely no urgency to start reducing interest rates.

Daly added that there is still more work to do to make sure that inflation is on course to return to the desired rate of 2%.

In Monday’s early New York session, New York President John Williams said he is more optimistic about potential growth but see rate cuts starting later this year.

On the Eurozone front, European Central Bank (ECB) policymaker Peter Kazimir see possibility of rate cuts starting from the June meeting if inflation continues to fall.

For the longer-term outlook, Kazmir said the ECB is not committed to any policy path beyond June, noting that they must maintain flexibility.

Last week, the ECB kept its Main Refinancing Operations Rate unchanged at 4.5% as expected. In a monetary policy conference, ECB President Christine Lagarde said if a fresh assessment increase policymakers’ confidence that inflation is heading back to target, then it “would be appropriate” to cut interest rates, Reuters reported.

EUR/USD

Overview
Today last price1.0639
Today Daily Change-0.0007
Today Daily Change %-0.07
Today daily open1.0646
Trends
Daily SMA201.0813
Daily SMA501.0823
Daily SMA1001.0867
Daily SMA2001.083
Levels
Previous Daily High1.0729
Previous Daily Low1.0622
Previous Weekly High1.0885
Previous Weekly Low1.0622
Previous Monthly High1.0981
Previous Monthly Low1.0768
Daily Fibonacci 38.2%1.0663
Daily Fibonacci 61.8%1.0689
Daily Pivot Point S11.0602
Daily Pivot Point S21.0559
Daily Pivot Point S31.0496
Daily Pivot Point R11.0709
Daily Pivot Point R21.0773
Daily Pivot Point R31.0816

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