EUR/USD Current price: 1.0982
- European macroeconomic data fail to impress and trigger Euro demand.
- Several Federal Reserve officials will be on the wires during the American session.
- EUR/USD consolidates losses just below 1.1000, lower lows at sight once below 1.0960.
The US Dollar (USD) maintained its positive momentum at the weekly opening, gaping higher against the Euro, although with the pair holding within a limited intraday range. The Greenback surged on Friday after the Nonfarm Payrolls (NFP) report showed the labor market in the United States (US) is much more healthier than feared. The world’s largest economy is in good shape, and the Federal Reserve (Fed) will not need to proceed with aggressive interest rate cuts. The odds for a 50 basis points (bps) trim plummeted to roughly 5% for November, with 25 bps cuts now expected in the upcoming meeting.
Meanwhile, European stock markets trade sourly, affected by escalating tensions in the Middle East. Israel and Iran continued with their reciprocal attacks throughout the weekend without a potential agreement in sight. The conflict may finally take its toll on financial markets and push investors into safety, albeit the only notable thing at the time is upward pressure in crude oil prices.
Data-wise, the Eurozone released October Sentix Investor Confidence, which improved to -13.8 from -15.4 in September. Also, EU August Retail Sales were up by 0.2% MoM, and 0.8% from a year earlier. German Factory Orders, on the other hand, fell by 5.8% in August compared to a month earlier and by 3.9% in the last 12 months.
The upcoming American session will bring little of interest, as the macroeconomic calendar only includes a couple of Fed speakers. Later in the week, the United States (US) will publish the September Consumer Price Index (CPI), a key inflation measure, although not the Fed’s favorite one. Still, the figures tend to impact the FX board as investors take the figures as a hint for the next Fed’s monetary policy decision.
EUR/USD short-term technical outlook
From a technical point of view, the daily chart for the EUR/USD pair shows it pulled back towards a daily ascendant trend line broken on Friday. The trend line, coming from 1.0665, the June monthly low, currently provides resistance at around 1.0990. At the same time, technical indicators remain within negative levels, losing their downward strength but still heading lower. Finally, a bearish 20 Simple Moving Average (SMA) extends its slide at around 1.1090, reflecting sellers’ control, while the 100 and 200 SMAs turned flat below the current price.
In the near term, and according to the 4-hour chart, the risk for EUR/USD skews to the downside. A bearish 20 SMA heads firmly lower, far below the 100 and 200 SMAs, which also gain downward strength. At the same time, technical indicators have stabilized, albeit within negative levels, without signs of a potential recovery at sight.
Support levels: 1.0960 1.0920 1.0885
Resistance levels: 1.0990 1.1040 1.1085
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