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Euro Latest: EUR/USD Upside Exhausted, Risking a Pullback

Euro Latest: EUR/USD Upside Exhausted, Risking a Pullback

Justin McQueen, Strategist

EUR/USD Price Analysis & News

  • EUR/USD Fails to Extend Above Feb Peak
  • ECB Doves Weigh on Euro

EUR/USD: Price action in the Euro is beginning to look exhausted as the break above the Feb high (1.2242) lacked any notable follow-through. That said, the pullback thus far has been capped by support at 1.2170-80, which also coincides with the rising trendline from the YTD low. However, should the pair close below, risks will start to turn towards more EUR/USD selling. While there is little in the way of newsflow day, focus is on next weeks key data, in which the latest US NFP report will be released.

Meanwhile, the ECB doves have been out in force to talk down the possibility of changes to PEPP purchases for Q3 (in other words tapering PEPP purchases) as we head towards a critical meeting in June.

Recent ECB commentary

  • ECB’s Panetta: The conditions that we see today do not justify reducing the pace of purchases, and a discussion above phasing out the PEPP is still clearly premature.
  • ECB’s Villeroy: Any hypothesis of a reduction of purchases partly for Q3 or the following quarters is purely speculative.
  • ECB’s Stournaras: Sees no reason to change the pace of PEPP purchase programme.

In the meantime, further ECB commentary will be key to watch as it will shape expectations going into the June 10th meeting and with ECB doves noting that PEPP purchase changes are not needed at present, the uptrend in the Euro has come to a halt.

EUR/USD Chart: Daily Time Frame

Euro Latest: EUR/USD Upside Exhausted, Risking a Pullback

Source: Refinitiv

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