Last week, the common European currency traded within the scope of the 1.3784-1.3864 price range, occasionally breaking above/below the top/bottom of the range. Still, the price failed to consolidate outside the range.
Today, on May 5th 2014, during the European trading session, the common European currency gained some value against the US Dollar. In particular, it went 0,07% up. The currency pair went from 1.3873 up to 1.3880.
The experts working for Masterforex-V Academy report that EURUSD is likely to retrace later today since there are no major economic reports from the eurozone scheduled for today.
Market Leader found out the reasons why the Euro is currently getting stronger against the US Dollar. The reason is that the US Dollar is too weak for the common currency.
Even last week, USD failed to win some ground from EUR despite pretty positive economic data coming from the US labor market. Friday’s Non-Farm Payrolls only managed to initiate a bullish reaction of the US Dollar against other major currencies, Masterforex-V Academy reports.
Big-scale investors anticipated that the Fed was about to start raising interest rates by mid 2015 instead of late 2014. Those expectations supported the US Dollar. Still, the selloff of the US Dollar started resumed after worse-than-expected figures on US industrial orders in March.
Still, the biggest reason why the US Dollar started showing weakness was the supposition made by economists that a strong employment report was caused by a drop in the amount of working population. Another bearish driver was a decline in the 10-year bond yield, which dropped by 0,022 percent points down to 2,58%.
At the same time, the experts of Masterforex-V Academy conducted comprehensive technical analysis to find out the near-term prospects in the market of EURUSD.
The H1 chart of EURUSD indicates that last week the price formed 2 waves of a smaller scale: the bullish one - 1.3774-1.3888 - as well as a possible retracement against it - 1.3888-1.3811.
Further on, a bullish move started from 1.3811 on Friday. As a result, the price created a new price range - 1.3811-1.3888. Therefore, the further prospects of the currency pair will depend on the reaction to these levels.
Resistance levels: 1.3881 and 1.3888.
Support levels: 1.3864, 1.3850, 1.3811, 1.3785, 1.3774.
