- China’s economic recovery accelerated in the first quarter, improving risk sentiment.
- Single-family US homebuilders’ confidence grew in April for the fourth consecutive month.
- Industrial activity in New York State rose for the first time in five months.
Today’s EUR/USD price analysis is bullish. After a steep increase overnight, the dollar fell on Tuesday as China’s economic recovery accelerated in the first quarter, increasing risk appetite.
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According to US data released on Monday, single-family homebuilders’ confidence grew in April for the fourth consecutive month, while industrial activity in New York state rose for the first time in five months.
The euro increased, although it was still below the one-year high of $1.10755 it reached last week. Traders anticipate that the region’s central bank will continue its course of monetary tightening.
According to the ECB, the United States and the Eurozone shouldn’t take their currencies’ role as reserve currencies for granted. This is because countries like China and Russia want to develop their own financial systems,
Some observers question the dollar’s eighty-year reign as the world’s reserve currency. This is in light of China’s rise to global dominance, the United States’ mounting debt, and geopolitical threats to Western influence from Ukraine and Taiwan.
According to information gathered by the ECB, over 60% of the world’s foreign exchange reserves and international debt are denominated in dollars, with the euro trailing far behind at 20%.
The ECB believes a digital euro version could increase its use abroad. However, it has warned that this might also come with risks, including making it easier to launder money and aiding currency runs in times of crisis.
EUR/USD key events today
Investors will focus on the building permits report from the US to see the state of the housing market amid high-interest rates.
EUR/USD technical price analysis: Bulls bounce off the trendline support
The EUR/USD is bouncing higher after respecting the trendline support and the 1.0900 support level. However, the price needs to break above the 30-SMA for bulls to take full control. The bias is bullish as the price has consistently formed higher highs and lows.
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If bulls cannot break above the SMA, we might see the price retest the trendline support. However, a break above the SMA would allow bulls to set their sights on the 1.1051 resistance.
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Source: https://www.forexcrunch.com/eur-usd-price-analysis-dollar-falls-as-risk-appetite-boosts/
