Wall Street retreated again on Tuesday probably affected by geopolitical concerns. Gold surged breaking above $1270/oz while US bonds rose. A rally in crude oil prices helped main stock indexes move off daily lows. Yesterday’s speech from Janet Yellen had no impact. She mentioned that the Federal Reserve focus now, is to sustain the progress of the economy.
Among currencies, the yen soared across the board. The greenback also lost ground against its European rivals and gained marginally versus commodity link currencies. Price action continues to be limited and liquidity is expected to decline sharply after tomorrow.
The euro rose modestly in the market after the release of the German ZEW survey (current situation index reached 6-year highs). Ahead, during the Asian session, Chinese inflation data is due. In the US no major economic reports will be released.
The EUR/USD pair didn’t reach weekly lows for the time, after doing so during eight consecutive days. On Tuesday, it spiked hiker after the beginning of the American session to 1.0630 but shortly after, lost momentum. It dropped back to the 1.0600 area and to the 20-hour moving average. It managed to remain on top, so it continues with a modest intraday upside tone for the coming hours. A slide below 1.0590 would strengthen the US dollar. A break below 1.0565/70, would target 1.0550 and then 1.0530. The dominant trend continues to point to the downside. For the euro to remove the bearish pressure significantly it needs to rise above 1.0640.
Support levels: 1.0565 1.0520 1.0490
Resistance levels: 1.0625 1.0670 1.0705