Daily Market Recap – EURUSD Returns on its support

The dollar recovered very slightly Friday against the euro, which remained at a high range, after cautious comments from European Central Bank (ECB) President Christine Lagarde and good U.S. indicators.

By market close on Friday, the euro was down 0.38% against the greenback to $1.21807.

The European single currency crossed the 1.22-dollar level on Tuesday for the first time since February 25 and has since tried to settle there.

“But at the end of a choppy week, investors are unwinding their position a bit. U.S. data was good and Christine Lagarde's cautious comments that the recovery remains uncertain weighed a bit on the euro,” said Brad Bechtel, director of Jefferies' currency division.

The IHS Markit U.S. manufacturing PMI posted a record high for May, at 61.5. On the European side, indicators were also strong.

The estimate published by IHS Markit “shows progress in Europe, with the composite index for the eurozone (a leading indicator of activity, editor's note) at 56.9 against 55.1 expected, which helps keep the euro-dollar pair close to a three-month high,” said Neil Wilson, an analyst at Markets.com.

In France, for example, private sector activity recorded its second consecutive month of growth in May and even accelerated with the easing of health restrictions, according to the same firm.

The first cryptocurrency, which was hovering around the $40,000 mark at the start of the session, fell 8.13% to $37,335 at market close on Friday.

The EURUSD has reversed its positive session of the previous day and is back on its near-term support around the 1.215 marks. The trend remains bullish with the 34 and 50 period moving averages aligned upwards. Fridays bearish candle was yet another logical breath of fresh air as it contacted resistance.

(Chart Source: Tradingview 23.05.2021)

Breaking through 1.2244 would allow for further upside towards 1.2350. Invalidation is below the last low at 1.2050 and the trend would turn below 1.1990, polarity line and 200-period moving average crossing. Traders should err on the side of caution at the start of the week, conservative long positions can be envisaged at this point for a near-term target of 1.225.

Support & Resistance Levels:

R3 1.25550

R2 1.24000

R1 1.23495

S1 1.21150

S2 1.20688

S3 1.20000

Disclaimer: This material has been created for information purposes only. All views expressed in this document are my own and do not necessarily represent the opinions of any entity.