. USD Strong, EUR/USD Hits 1-Month Low - 13 May 2023

USD Strong, EUR/USD Hits 1-Month Low – 13 May 2023

USD Strong, EUR/USD Hits 1-Month Low – 13 May 2023

13 May 2023

The worst week for EUR/USD since September 2022 is expected.

The US Dollar increased significantly on Friday, extending its weekly gains and sending the EUR/USD rate to its lowest point in a month in the 1.0850 regions. In terms of the US dollar, the Euro is on pace to suffer its largest weekly loss since September 2022.

Early on Friday, the EUR/USD chart showed a technical retracement after reaching its lowest point in a month on Thursday at 1.0900. The pair can contain its losses thanks to the little uptick in market sentiment in the European morning, and risk aversion may continue to dictate the price action in the lead-up to the weekend.

Investors avoided risky assets on Thursday due to resurgent concerns over an escalating banking crisis in the United States. Therefore, despite the dismal weekly initial jobless claims and lower-than-anticipated April Producer Price Index (PPI) data, the US Dollar (USD) outperformed its rivals.

Early on Friday, the Euro Stoxx 50 is up about 0.5%, and US stock index futures are trading in positive territory. Prior to the weekend, a risk rally on Wall Street may add pressure to the USD and help the EUR/USD continue its recovery.

Market investors will closely monitor any remarks made by European Central Bank (ECB) officials in the interim. The Euro had trouble finding demand as ECB policymaker Joachim Nagel rejected market speculation that the ECB would likely raise its key rates twice more in July and September.

The University of Michigan’s Consumer Sentiment Index for May will be discussed on Friday’s US economic agenda. Safe-haven flows may return to the markets if the data demonstrates that banking problems have lowered consumer confidence, which would cause EUR/USD to remain weak going into the weekend.

EUR/USD Technical Chart

  • The Fibonacci 23.6% retracement level and the 200-period Simple Moving Average (SMA) are in line at 1.0950/1.0960, where strong resistance appears to have developed on the upswing. If the EUR/USD falls below that mark and begins to act as support, sellers may decide to leave the market. Then, the psychological level at 1.1000, the static level at 1.1050, and the 100-period SMA at 1.1000 might be considered as the next positive targets.