- The US Dollar fails to benefit from upbeat US data and higher Treasury yields.
- The Euro outperforms as European yields also rise.
- The EUR/USD pair trades near the 1.0600 area, maintaining a bullish bias.
The EUR/USD pair rose on Tuesday, disregarding positive US data and higher Treasury yields. The pair reached a high of 1.0595 before pulling back and trimming its gains.
The ZEW survey showed positive signs in the region, with the Eurozone Sentiment Index improving in October to 2.3 from -8.9, surpassing market expectations. The German ZEW also recovered from -11.4 to -1.1, beating the market consensus of -9. Next week, the European Central Bank (ECB) will have its monetary policy meetings, and it is expected to keep rates unchanged for the first time since June 2022.
On Tuesday, upbeat US economic data included Retail Sales (up 0.7% in September versus an expected 0.3%) and Industrial Production (0.3% versus 0%). The US Dollar received a brief boost from this data but quickly lost momentum. The EUR/USD dropped to 1.0540 but then reversed its course to the upside.
Both US and European bond yields rose sharply. The 10-year US yield jumped 2.60% to 4.86%, while the German equivalent rose from 3.40% to 2.88%. The bond market continues to experience significant fluctuations. If Eurozone yields follow Treasury yields, the impact could be offset, as seen on Tuesday. However, robust US data is likely to limit the upside in the EUR/USD pair. On Wednesday, US Housing Starts, Building Permits, and the Fed's Beige Book are due.
EUR/USD short-term technical outlook
-638331685341882666.png)
The EUR/USD has risen above the 20-day Simple Moving Average (SMA), which is still showing a negative slope. The Momentum indicator has risen above 100, indicating a positive signal for the Euro. However, the primary trend remains downwards.
On the 4-hour chart, the price is well supported and holding above several key SMAs, with technical indicators favoring the upside. The immediate resistance level is around 1.0600, and a break above that would draw attention to 1.0630. A daily close above the latter level would pave the way for further gains. On the flip side, a decline below 1.0540 should weaken the outlook for the Euro, exposing 1.0500.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
AUD/USD languishes near multi-year lows below 0.6250 after dovish RBA Minutes
AUD/USD remains depressed below 0.6250 early Tuesday after the December RBA Minutes reiterated that upside inflation risks had diminished, which reaffirms bets for a rate cut in early 2025. This, along with concerns about China's fragile economic recovery and US-China trade war, undermines the Aussie and weighs on the pair.
USD/JPY eases toward 157.00 after Japanese verbal intervention
USD/JPY has come under renewed selling pressure, easing toward 157.00 after Japanese Finance Minister Kato's verbal intervention. The pair erased early gains, induced by the October BoJ meeting Minutes. However, the downside could be limited as the US Dollar hold the previous rebound.
Gold: Buyers defends $2,600 ahead of holiday trading week
Gold price defends the $2,600 mark in the Asian session on Tuesday as buyers look to regain control. Markets face a relatively quiet trading session ahead of the holiday trading week. The US Richmond Fed Manufacturing Index for December will be watched out for later on Tuesday.
Solana dominates Bitcoin, Ethereum in price performance and trading volume: Glassnode
Solana is up 6% on Monday following a Glassnode report indicating that SOL has seen more capital increase than Bitcoin and Ethereum. Despite the large gains suggesting a relatively heated market, SOL could still stretch its growth before establishing a top for the cycle.
Bank of England stays on hold, but a dovish front is building
Bank of England rates were maintained at 4.75% today, in line with expectations. However, the 6-3 vote split sent a moderately dovish signal to markets, prompting some dovish repricing and a weaker pound. We remain more dovish than market pricing for 2025.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.