Today’s Euro (EUR/USD) is still in the forefront around the 1.1000 level as buyers continue to push the rally towards the highest level since March 2022. This happened after the previous day’s decline from the 1.1095 level, on Thursday morning in Europe. This happened due to the broad US Dollar weakness and concerns about the hawkish policy of the European Central Bank (ECB). Moreover, ahead of the release of the first quarter (Q1) Gross Domestic Product (GDP) data, it is expected to decline to 2.0% on an annualized basis, compared to 2.6% previously. Recently, interest rate futures showed an increase in market bets for an ECB rate hike of 0.50% at its May monetary policy meeting. Although the odds are slim, the majority of 25 basis points (bps) of a Fed rate hike and the subsequent policy pivot call make the bloc’s central bank more favorable than its US counterpart, which in turn supports the EUR/USD movement - up despite mixed US data. In the latest release, US Durable Goods Orders showed a rise in March, but it could not overshadow the suspicious details of Consumer Confidence released earlier. It is worth noting that the US Purchasing Managers' Index (PMI) was comparatively lower compared to its European and German counterparts, indicating greater economic optimism around the European continent. Recently, the US House of Representatives approved a bill that would allow the government to negotiate an extension of the debt ceiling. However, policymakers are likely to remain at loggerheads amidst the wide divergence between the demands of the Republicans and Democrats. However, cautious optimism regarding the US debt ceiling discussions has kept the Euro pair stronger. Moreover, the latest tax revenue figures from the US have allowed Goldman Sachs (GS) to expect that the US Treasury Department can avoid the risk of a federal payment default by the end of July, which in turn has added to the strength of the Euro pair. Recently, positive earnings reports from Microsoft and Alphabet Inc. have kept the Nasdaq strong. However, rising concerns over First Republic Bank (FRB), which saw its shares drop 20% on Wednesday after a 50% plunge the previous day, weighed on sentiment and boosted EUR/USD. Moving forward, the US Q1 GDP print will be important to watch for intraday traders of the EUR/USD pair. Additionally, headlines surrounding the US debt ceiling discussions and banking sector news are also important to follow. On the technical analysis, a Bearish RSI Divergence is seen on the Daily chart that combines with the EUR/USD pair’s failure to provide a daily closing beyond an ascending resistance line from May 2022, which is located around 1.1090 at the time of writing. This has attracted sellers.

Also Read : German CPI Rises 7.4 Percent, Euro Moves Higher

 

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