EUR/USD gains as US Dollar corrects ahead of US NFP

EUR/USD rebounds above 1.1300 as the US Dollar retraces ahead of the US NFP data for April.
Flash Eurozone HICP shows that inflationary pressures grew at a faster-than-expected pace in April.
China has shown openness to discuss bilateral trade with Washington, lifting the overall market risk tone.

EUR/USD holds initial gains to near 1.1300 in Friday’s European session. The major currency remains gains at the expense of the US Dollar (USD), which corrects despite an increase in hopes of easing trade tensions between the returns above the key level of 1.1300 on Friday from its two-week low of 1.1265 posted on Thursday. The major currency pair rebounded after attracting bids near the 20-day Exponential Moving Average (EMA) around 1.1260.

The 14-day Relative Strength Index (RSI) falls inside the 40.00-60.00 range, indicating that the bullish momentum is concluded for now. However, the upside bias still prevails.

Looking up, the psychological level of 1.1500 will be the major resistance for the pair. Conversely, the 25 September high of 1.1214 will be a key support for the Euro bulls.

(This story was corrected on May 2 at 10:16 GMT to say, in the first bullet and first paragraph, that the EUR/USD pair trades near 1.1300, not 1.3300. It was also corrected to say that analysts were expecting the Eurozone’s HICP at 2.1%, not 2.2%.)

Economic Indicator

Core Harmonized Index of Consumer Prices (YoY)

The Core Harmonized Index of Consumer Prices (HICP) measures changes in the prices of a representative basket of goods and services in the European Monetary Union. The HICP, – released by Eurostat on a monthly basis, is harmonized because the same methodology is used across all member states and their contribution is weighted. The YoY reading compares prices in the reference month to a year earlier. Core HICP excludes volatile components like food, energy, alcohol, and tobacco. The Core HICP is a key indicator to measure inflation and changes in purchasing trends. Generally, a high reading is seen as bullish for the Euro (EUR), while a low reading is seen as bearish.

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