The euro is soaring, reaching seven-week highs against the US dollar. As a result, this impressive performance has produced extraordinary tides in the foreign exchange market. Thursday saw the EUR/USD pair continue to solidify its bullish trend this week, hovering above the psychologically important 1.1500 level. Yesterday’s incredibly weak economic data from the U.K. has sent the British pound reeling. Consequently, GBP/USD has fallen back closer to 1.3550.
In April, the UK’s Gross Domestic Product (GDP) fell by 0.3%, a decline that exceeded analysts’ expectations of a 0.1% drop. This economic contraction has prompted concerns about the overall health of the UK economy and has adversely affected the pound. Further adding to the downward pressure on the currency were UK industrial data that missed forecasts. Therefore, GBP/USD finds it tough to hold onto its gains, suggesting a trader’s minefield all around.
With all eyes on the European Central Bank (ECB), market participants are focused on the release of US Producer Price Index (PPI) inflation data. ECB – FX traders & investors are eager tracking comments from ECB officials for any clues helpful in shaping currency directions. The euro’s current strength may reflect expectations of potential policy shifts from the ECB that could support further gains against the dollar.
On the crypto side, Litecoin has found it difficult to hold the line underneath its resistance level. The number of bearish bets on Litecoin has increased, reaching a monthly high. Even after failing to break above substantial resistance, Litecoin is invalidating those moves by showcasing far more weakness. Therefore, the technical outlook for Litecoin is weak. Market participants looking to short the emerging asset should look for entry points between $93 and $95, as it continues to battle.
These currency and cryptocurrency markets are extremely dynamic. These recent ups and downs illustrate the complex interplay between economic signals, trader psychology, and international developments. With EUR/USD remaining in focus during Thursday’s European session, the market’s direction will likely depend on forthcoming economic data and central bank communications.