Meanwhile the EUR/USD currency pair continues to trade just below the 1.1400 whole figure mark, flat and neutral. It is buffeted on all sides by countervailing winds from risk aversion and the hollowing out of US dollar end demand. Recent economic data out of the United States has drastically shifted the present landscape. Disappointing preliminary estimates of Q1 GDP are pressing down sharply on market sentiment. Against the backdrop of these shifting dynamics, the EUR/USD currency pair is rife with volatility. It’s still oscillating just below flat 20 Simple Moving Average (SMA), further proving its lack of momentum.
The EUR/USD pair is trapped in a tight 50 pip range. This rubs up against a strange tradeoff between bearish upside and limited downside. Despite the technical indicators showing some slowdown in easing while still in positive territory, the mood is truly bleak. The combination of Euro demand pretty lukewarm and overall USD interest quieter than usual would complicate the picture.
The 20 SMA provides a dynamic support line at around 1.1265. That stabilizes the currency pair and allows it to find its footing in today’s highly volatile markets. The 100 SMA has been ever-increasing below the current level. This indicates that despite the previously identified bearish undercurrents, they have still been clearly stifled within the current technical structure of moving averages. So far the longer moving averages languish just over 600 pips below the current short-term trading level. At least they’re making very gradual progress in the right direction.
This mixed market sentiment is illustrative of a larger economic picture that has dragged down both currencies. The latest US GDP numbers disappointingly missed the mark. This has had a major effect on the demand for USD especially in the context of the EUR/USD currency pair. Uncertainty is keeping investors from supporting either currency at the moment. This caution has led to some truly abysmal trade flows, with movements stuck under the key 1.1400 mark.
Despite these challenges, analysts have noted that EUR/USD continues to develop above all its moving averages, which suggests a potential for upward movement should market conditions improve. The environment overall isn’t particularly conducive to big bullish moves, and further upside could be capped.