- EUR/USD went into a consolidation phase near 1.0550 following Thursday's indecisive action.
- ECB left key interest rates unchanged as expected after October meeting.
- Rising US stock index futures point to a bullish opening in Wall Street.
EUR/USD declined toward 1.0500 with the immediate reaction to the European Central Bank's (ECB) monetary policy announcements on Thursday but managed to recover above 1.0550. The pair faces key resistance at 1.0570 and the near-term technical outlook suggests that sellers could retain control unless this hurdle is cleared.
The ECB announced that it left the key interest rates unchanged, following 10 consecutive rate increases. In its policy statement, the bank noted that interest rates at current levels, if maintained for a sufficiently long duration, will make a substantial contribution to the inflation goal. Although the initial reaction caused the Euro to weaken against its rivals, ECB President Christine Lagarde's comments in the press conference helped the currency find support.
Lagarde said that it was premature to talk about rate cuts and added that they are not going to say that they have reached the peak rate.
Euro price this week
The table below shows the percentage change of Euro (EUR) against listed major currencies this week. Euro was the weakest against the Australian Dollar.
| USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF | |
| USD | 0.29% | 0.33% | 0.70% | -0.47% | 0.15% | 0.06% | 0.80% | |
| EUR | -0.29% | 0.05% | 0.41% | -0.76% | -0.14% | -0.23% | 0.52% | |
| GBP | -0.32% | -0.05% | 0.37% | -0.80% | -0.17% | -0.27% | 0.49% | |
| CAD | -0.71% | -0.42% | -0.40% | -1.19% | -0.55% | -0.66% | 0.10% | |
| AUD | 0.47% | 0.77% | 0.81% | 1.16% | 0.64% | 0.52% | 1.28% | |
| JPY | -0.15% | 0.12% | 0.15% | 0.54% | -0.66% | -0.12% | 0.66% | |
| NZD | -0.05% | 0.24% | 0.28% | 0.64% | -0.53% | 0.11% | 0.76% | |
| CHF | -0.82% | -0.53% | -0.49% | -0.11% | -1.30% | -0.67% | -0.77% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).
At the time of press, US stock index futures were up between 0.3% and 0.6% on the day, pointing to a bullish opening in Wall Street. In the last two weeks, investors moved away from risk-sensitive assets ahead of the weekend on fears of a further escalation of the Israel-Hamas conflict. In case risk flows continue to dominate the action later in the day, the US Dollar (USD) could find it difficult to hold its ground and help EUR/USD edge higher.
The US economic docket will feature the Personal Consumption Expenditures (PCE) Price Index data for September, which is unlikely to trigger a market reaction after markets saw the quarterly figures on Thursday. According to the US Bureau of Economic Analysis, the Core PCE inflation declined to 2.4% on a quarterly basis in the third quarter from 3.7% in the second quarter.
EUR/USD Technical Analysis
The Relative Strength Index (RSI) indicator on the 4-hour chart stays slightly below 50, highlighting the lack of buyer interest. 1.0570 (broken ascending trend line, Fibonacci 23.6% retracement of the latest downtrend, 50-period Simple Moving Average (SMA), 100-period SMA) aligns as key resistance. If the pair rises above that level and starts using it as support, 1.0600 (200-period SMA) and 1.0640 (Fibonacci 38.2% retracement) could be set as next bullish targets.
On the downside, interim support is located at 1.0520 (static level) ahead of 1.0500 (psychological level, static level) and 1.0450 (end-point of the latest downtrend).
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