EUR/USD has benefited from some calm in markets, yet that may change when trading on Wall Street begins. Concerns about inflation have been weighing on stocks – especially highly valued shares of tech companies – and there may be more room for the downside, FXStreet’s Analyst Yohay Elam briefs.
The euro has issues of its own
“The most significant concern is inflation. Investors thought that the Federal Reserve would stay lower for longer after the disappointing Nonfarm Payrolls report. However, high producer prices from China and some hawkish comments from Robert Kaplan, President of the Dallas Fed, changed their minds. And now, a fresh fall in stocks could boost the safe-haven dollar and send EUR/USD back down.”
“Despite the eurozone’s accelerating vaccination campaign, members of the European Central Bank are pushing back against the idea of tapering bond buys, implying more euro-printing.”
“Resistance awaits at the May peak of 1.2180, followed by 1.2240 and 1.23, levels last seen early in the year.”
“Support is at 1.2150, the April peak, and then at 1.2125 and 1.2075. Further down, 1.2050 and 1.2015 await EUR/USD bears.”