EUR/USD renews weekly top above 1.0400 as Fed’s pivot is in the air, ECB Accounts eyed
|- EUR/USD grinds near one-week high, prints three-day uptrend, despite latest retreat from the daily top.
- FOMC Minutes, statistics from the United States favor US Dollar bears.
- Challenges to sentiment from China, Thanksgiving holiday allows buyers to take a breather.
- Germany IFO data, ECB Minutes may help buyers amid cautious optimism in the bloc.
EUR/USD pares intraday gains around the weekly top as it makes rounds to 1.0400 during Thursday’s Asian session. The major currency pair’s latest pullback could be linked to the market’s fears from the Coronavirus, as well as consolidation due to the Thanksgiving holiday in the United States.
Market sentiment sours as Chinese media highlights the urge for tackling the Covid woes as the virus numbers approach record highs. On the same line could be the mixed comments from the European policymakers.
European Central Bank (ECB) Vice President Luis de Guindos stated Wednesday, “It is very likely that we will see negative growth rates in the fourth quarter in the Eurozone.” The policymaker also added that the ECB will keep raising interest rates to try to bring inflation down towards mid-term goals. Additionally, Germany’s central bank the Bundesbank released its monthly report and stated, "The inflation rate could stay in double digits also beyond the turn of the year."
However, the upbeat prints of the bloc’s activity data and dovish Federal Open Market Committee (FOMC) Meeting Minutes keep the EUR/USD buyers hopeful.
Talking about the preliminary activity data for November, Germany’s S&P Global/BME Manufacturing PMI improved to 46.7 versus 45.0 market forecasts and 45.1 while the Services counterpart came out as 46.4 compared to 46.2 expected and 46.5 previous readings. On the other hand, Eurozone S&P Global Manufacturing PMI also rose to 47.3 for the said month from 46.4 prior and 46.0 consensus figure. That said, the bloc’s Services PMI reprinted 48.6 figure while crossing expectations of registering 48.0 number.
On the other hand, the latest Fed Minutes signaled that the policymakers discussed the need of slowing down the interest rate hikes. Additionally weighing on the Greenback were chatters over the “sufficiently restrictive” level of the Federal Reserve’s (Fed) interest rates, as indicated in the Fed Minutes.
While portraying the mood, the S&P 500 Futures struggle to trace Wall Street’s gains whereas the US 10-year Treasury yields await fresh directions at the weekly lo near 3.68% by the press time.
Moving on, the first readings of Germany’s IFO sentiment numbers for November will precede the ECB Monetary Policy Meeting Accounts, mostly known as ECB Accounts, to entertain EUR/USD traders. Although likely upbeat statistics and the hawkish tone of the ECB Accounts may keep the quote firmer, signals of the recession may probe the upside momentum.
Technical analysis
A successful break of the 50-SMA and a one-week-old descending trend line, respectively near 1.0340 and 1.0280, join the bullish MACD signals to keep the EUR/USD buyers hopeful of approaching the monthly high near 1.0480, as well as the 1.0500 threshold.
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