在避险情绪中空头继续主导欧元兑美元

The EURUSD pair remains largely dominated by the bears as it continues its downtrend stretching back 11 months ago. On Tuesday, 26 April 2022, the pair dipped to a more-than-two-year low at 1.06727. Despite some upbeat data in the Eurozone (German IFO) and the hawkish statements from the European Central Bank (ECB), the pair fails to advance higher as the US dollar strength remains in the driver’s seat for the pair’s movement.

Safe haven status buoys US Dollar

The US Dollar Index (DXY), which measures the greenback’s strength against a basket of rival currencies, soared to 101.8, a high point not seen since 25 March 2020. The dollar rides on tailwinds amid the risk-off sentiment in the market as Russo-Ukraine war continues with no signs of de-escalation. Lockdown in more cities in China also raised concerns on global supply chain issues.

Fed completes hawkish pivot

In the face of sky high inflation, US Federal Reserve Chairman Jerome Powell mentioned last Thursday that a half-point interest rate increase “will be on the table” when the Fed meets on 3-4 May to approve a series of rate increases this year. In the previous policy meeting in March, rates were raised by 0.25%. In line with market expectations, a 0.50% hike will be a more aggressive move and would continue to provide strength to the US dollar as increasing yield draws inflow of capital into USD denominated assets.

ECB expresses hawkish stance

ECB President Christine Lagarde said in an interview that the ECB “will be interrupting the purchases of assets in the course of the third quarter, a high probability that we do so early in the third quarter. And then we will look at interest rates and how and by how much we hike them.” Despite the hawkish remarks, the Euro took a hit as markets expected a sooner rate hike by the ECB, in July.

On the other hand, the euro also suffered on comments from the European Commission Executive Vice President Valdis Dombrovskis that they are working on a sixth sanctions package and one of the issues they are considering is some form of an oil embargo on Russia.

技术分析

The technical picture for EURUSD remains bearish. The pair broke down from a bear pennant formation on 4 April and it is on track to achieving the downside technical target at 1.0379 (S2), which coincides with a support established since January 2017. Technical indicators like the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) are both validating the ongoing bearish momentum of the pair.

Looking ahead, we anticipate that the pair will head lower to test the March 2020 support level at 1.0636 (S1). If this level is broken, the next support lies at 1.0379 (S2). In the meantime, 1.0809 (R1) and 1.1016 (R2) in extension will serve as a resistance for the pair.

Tuesday, April 26

USD – Durable Goods Orders (Mar), Durable Goods Orders ex Defense(Mar), Durable Goods Orders ex Transportation(Mar), Nondefense Capital Goods Orders ex Aircraft(Mar), Housing Price Index (MoM)(Feb), S&P/Case-Shiller Home Price Indices (YoY)(Feb), Consumer Confidence(Apr), New Home Sales (MoM)(Mar)

Wednesday, April 27

EUR – Germany Gfk Consumer Confidence Survey(May), ECB’s President Lagarde speech

USD – Pending Home Sales (MoM)(Mar)

Thursday, April 28

EUR – EU Economic Bulletin, EU Business Climate(Apr), EU Consumer Confidence(Apr), German Harmonized Index of Consumer Prices (YoY)(Apr)

USD – Gross Domestic Product Annualized(Q1), Gross Domestic Product Price Index(Q1), Initial Jobless Claims(Apr 22), Initial Jobless Claims 4-week average(Apr 22), Personal Consumption Expenditures Prices (QoQ)(Q1)

Friday, April 29

EUR – France Gross Domestic Product (QoQ)(Q1), German Gross Domestic Product (QoQ)(YoY)(Q1), German Gross Domestic Product w.d.a (YoY)(Q1), Italy Gross Domestic Product (QoQ)(YoY)(Q1), EU Gross Domestic Product s.a. (QoQ)(YoY)(Q1), EU HICP (YoY)(Apr)

USD – Personal Income (MoM)(Mar), Personal Spending(Mar), Chicago Purchasing Managers’ Index(Apr), Michigan Consumer Sentiment Index(Apr)