The EUR/USD currency pair today rallied from a new 2018 low set in the late Asian session based on improved investor sentiment towards the single currency. The currency pair’s rebound from its lowest levels since December 22 could have been triggered by technically oversold levels, which led to widespread short-covering trades.
The EUR/USD currency pair today rallied from a low of 1.1822 to a high of 1.1895 before giving up some of its gains to trade almost flat at the time of writing.
The softer recent European economic releases continued to weaken the euro with today’s releases further applying downward pressure. The disappointing Italian retail sales data and the weak French industrial production data released today contributed to the euro’s weakness. The pair’s initial recovery could be attributed to improved investor sentiment towards the euro following President Donald Trump‘s withdrawal from the Iran nuclear deal. The lack of major releases from the European docket also contributed to the pair’s decline.
The release of the weak US Producer Price Index data for April by the Bureau of Labor Statistics in the early American session further boosted the currency pair. The PPI rose by a monthly 0.1% and an annualized 2.6%; both prints missed expectations. The core PPI print also missed consensus estimates as it rose by 0.2% in April culminating in an annualized 2.3% print.
The currency pair’s future performance is likely to be affected by tomorrow’s European Central Bank economic bulletin and US consumer price index data.
The EUR/USD currency pair was trading at 1.1852 as at 15:59 GMT having declined from a daily high of 1.1895. The EUR/JPY currency pair was trading at 129.99 having rallied from a low of 129.36.
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