EUR/USD Retreats From Yearly Highs But Scores Weekly Gain

The EUR/USD lost ground on Friday, trimming weekly gains as the U.S. dollar rose across the board amid the deterioration in risk sentiment. Still, the pair scored the fourth weekly advance in a row and the sixth gain out of the last seven weeks.


At the time of writing, the EUR/USD pair is trading at the 1.0995 area, 0.46% below its opening price.

Comments from Fed officials fueled the recovery of the greenback. FOMC member Christopher Waller said that the central bank has not made much progress on the inflation goal and argued rates need to rise further. Meanwhile, Chicago Fed President Austan Goolsbee noted that “a mild recession is definitively on the table as a possibility.”

Meanwhile, U.S. data came in mixed, with retail sales dropping more than expected by 1% in March. Data from the UoM showed that the April sentiment index came in at 63.5, above the consensus of 62, while the 5-year inflation expectations stood at 2.9%.

Against this backdrop, U.S. bond yields were on the rise, with the 10-year yield advancing past 3.5%, while the 2- and 5-year yields were up at 4.09% and 3.59%. Wall Street indexes closed the day in the red. The S&P 500 lost 0.21%, the Dow Jones Industrial Average dropped 0.42%, and the Nasdaq Composite shed 0.35%. However, all three indexes closed the week higher.


From a technical standpoint, the EUR/USD maintains a bullish bias on the weekly and daily charts despite the recent correction. The EUR/USD pair is trading above its main daily moving averages and closing the week above the 100-week SMA, which is a positive signal.

On the upside, the next resistance levels are seen at 1.1070 and the 1.1100 psychological level ahead of the 200-week SMA at 1.1199. A break above this level would improve the broader perspective. On the other hand, the following support areas could be found at 1.0950 and 1.0900.