COMMENT-EUR/USD longs still face bearish influences

EUR/USD turned lower Friday after striking an 11-session high and downside influences remain, which could put the pair on a path toward 1.0450/1.0500.

U.S. March PCE data failed to alter investors' expectations for the Fed, with rates markets pricing in just over 35bps of cuts for 2024, little changed from Thursday but lower from earlier this week.

U.S. yields (US2YT=RR) traded lower despite that but German-U.S. 2-year spreads (US2DE2=RR) widened again and neared the base of the channel in place since September.

Today's price action is likely another concern for EUR/USD longs

The pair rallied above the 50% Fibonacci retracement of 1.0885-1.0602 but could not hold onto gains. Bearish technical signals emerged on daily charts as a result.

Daily RSI diverged and a daily inverted hammer candle formed. The test and hold of the bear flag top on daily charts added to bearish signals.

Already bearish monthly tech signals got reinforced by the fresh daily signals.

Euro zone April CPI and Q1 GDP as well as U.S. April ADP, March JOLTS and payroll reports are risks next week and may be the catalyst to send EUR/USD downward.

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