EURO MOVES SIDEWAYS AS LAGARDE POINTS TO JULY RATE HIKE

Cryptocurrency prices stabilized slightly even as one of the biggest coins in the industry collapsed. Bitcoin stabilized slightly above $30,000 while Ethereum is still above $2,300. LUNA, the native coin for the Terra ecosystem, has crashed by more than 90% after challenges emerged in its stablecoin, Terra USD. The stablecoin lost its peg and moved to a low of $0.45. In a statement on Tuesday, Janet Yellen made the case for increasing regulations in the industry. Analysts believe that stablecoins pose a major challenge to the digital currencies industry.

The euro moved sideways after Christine Lagarde sent clear signals that the ECB will hike interest rates in July. In a speech in Slovenia, she said that she expects that the bank will stop expanding its balance sheet through asset purchases in the third quarter. She then said that the bank will start raising rates sometime after that. The statement came a day after the German Bundesbank president urged the bank to start hiking rates in July. Inflation in the Euro area has moved to a record high of 7.5%, almost four times the bank’s target of 2%. Earlier in the day, data in Germany showed that the headline CPI rose to 7.4% in April.

The US dollar declined after the latest consumer price index data from the United States. Data by the Bureau of Labor Statistics showed that the country’s consumer inflation dropped from 8.5% in March to 8.3% in April. On a month-on-month basis, inflation declined from 1.2% to 0.3%. On the other hand, the core CPI declined from 6.5% to 6.2%. These numbers showed that the country’s inflation may have peaked. The next key data to watch will be the latest US oil inventory data.

EURUSD

The EURUSD pair moved sideways after the hawkish statement by Christine Lagarde. It is trading at 1.0557, where it has been in the past few days. On the hourly chart, the pair moved between the middle and upper side of the Bollinger Bands. The Relative Strength Index has stayed above the neutral point at 50. The Average Directional Index has moved upwards. It has formed a triangle pattern. Therefore, the pair will likely remain in this range today.

USDJPY

The USDJPY pair declined to a low of 129.50, which was lower than the year-to-date high of 131.28. It has moved slightly below the 25-day moving average. The Relative Strength Index (RSI) has moved below the oversold level. It has also formed a small bearish pennant pattern. Therefore, the pair will likely keep falling as investors target the key support at 129.35.

ETHUSD

The ETHUSD pair rose to a high of 2,420, which was the highest point since Monday. It has moved above the envelope indicator. The MACD has formed a bullish crossover while the Relative Strength Index has moved slightly above the oversold level. The pair will likely remain being under pressure in the near term, with the next key support being at 2,250.