Fundamental (EUR/USD) and technical analysis on EURUSD on May 25
Fundamental Analysis for EUR/USD:
Upcoming euro economic releases such as GDP q/q, GDP y/y and GfK Consumer Confidence are not expected to show significant changes from previous readings. This suggests that the impact on the EURUSD might be limited if there are no surprises in the actual values. However, speeches by ECB Vice President de Guindos and German Federal Bank President Nagel may provide insights into monetary policy and potentially influence market sentiment on the euro, which could have an impact on the EURUSD pair.
Technical Analysis for EUR/USD:
From a technical perspective, EURUSD is currently in a medium-term uptrend, but recent price action indicates a move to a downtrend since early May. The RSI indicator pointing down below the 50 level and the negative dynamics of the Mom indicator suggest a greater likelihood of further declines. Moreover, the price is trading below the 21-period simple moving average, which reinforces the bearish sentiment.
Conclusion:
Combining both analyses, the fundamentals point to a mixed sentiment, while the technical analysis leans towards a bearish outlook for the EURUSD pair. This suggests that the euro could face some downward pressure against the U.S. dollar in the near term.
Based on the above as the main scenario in my opinion we can consider short positions aimed at the continuation of the downtrend below 1.0825 to 1.0700, while a break above 1.0825 may require reassessment of the trend direction.
Upcoming euro economic releases such as GDP q/q, GDP y/y and GfK Consumer Confidence are not expected to show significant changes from previous readings. This suggests that the impact on the EURUSD might be limited if there are no surprises in the actual values. However, speeches by ECB Vice President de Guindos and German Federal Bank President Nagel may provide insights into monetary policy and potentially influence market sentiment on the euro, which could have an impact on the EURUSD pair.
Technical Analysis for EUR/USD:
From a technical perspective, EURUSD is currently in a medium-term uptrend, but recent price action indicates a move to a downtrend since early May. The RSI indicator pointing down below the 50 level and the negative dynamics of the Mom indicator suggest a greater likelihood of further declines. Moreover, the price is trading below the 21-period simple moving average, which reinforces the bearish sentiment.
Conclusion:
Combining both analyses, the fundamentals point to a mixed sentiment, while the technical analysis leans towards a bearish outlook for the EURUSD pair. This suggests that the euro could face some downward pressure against the U.S. dollar in the near term.
Based on the above as the main scenario in my opinion we can consider short positions aimed at the continuation of the downtrend below 1.0825 to 1.0700, while a break above 1.0825 may require reassessment of the trend direction.
USD: The GDP q/q expectations indicate no major change in economic growth, which may lead to limited impact on the US dollar unless there are surprises in the actual figures. The jobless claims expectations suggest a slight improvement in the labor market, which could be supportive of the US dollar. The pending home sales and unfinished real estate market sales expectations may impact the housing market sentiment and could have a slight influence on the US dollar's value.