EUR/USD remains near daily highs, still headed for weekly losses
After closing every single day of the week with losses, the EUR/USD pair rebounded strongly on Friday amid a weaker greenback and the ECB speculation. As of writing, the pair was trading at 1.0932, up 0.64% on the day. On a weekly basis, the pair is nearly 80-pips below its opening level.
On Friday, both the consumer inflation and the retail sales data from the United States came in below the expectations and triggered a USD sell-off as the market's expectation of a Fed June rate hike decreased. The pair added to its daily gains following the data and reached its session high at 1.0935. After spending the majority of the day around 99.50, the US Dollar Index slipped towards the 99 handle and closed the week at 99.05, still above the opening level of 98.47.
- US Retail Sales: Stronger finish for Q1, modest start in Q2 - Wells Fargo
- CME Group FedWatch's June hike probability eased below 80% post-CPI
The bigger portion of the daily rise occurred after a report by the German newspaper Der Spiegel aggravated the speculations that the ECB was planning to start a tapering as early as July. The newspaper claimed that the bank wouldn't just drop the amount of the QE to zero at the end of the year, it would rather do it in steps of €10-€20 billion cuts. After consolidating below the 1.09 handle during the Asian session and the early European session, the pair made a quick 50-pip jump following the report.
- US: Key events for next week - Danske Bank
Technical outlook
1.1000 (psychological level) is the initial hurdle for the pair ahead of 1.1020 (May 8 high) and 1.1060 (Oct. 13 high). To the downside, supports are located at 1.0840 (May 11 low) ahead of 1.0765 (200-DMA) and 1.0715 (100-DMA).