- DXY rebound loses steam.
- 1.1950 support holds the key.
- German datasets – Up next.
The EUR/USD pair staged a brief recovery from a dip to 1.1958 levels, although remained confined within the familiar 20-pips, as investors await fresh trading impetus for the next direction.
EUR/USD holds well below daily pivot
The spot remains better bid so far this Tuesday, now looking to take on the recovery towards the 1.20 handle, as the US dollar witnesses fresh selling across its major rivals amid subdued Treasury yields and mixed Fedpseaks. The USD index drops -0.12% to daily lows of 91.96, extending the retreat from five- day tops of 92.13.
Fed's Williams noted overnight that the price-level targeting has benefits while painting a benign picture of Fed rate hikes while Fed's Bostic said that the Fed should be cautious if yield curve continues to flatten, adding that three rate hikes in 2018 may be too much. Fed’s Rosengren said, “optimal rate of inflation may move around just as does the natural rate of unemployment”.
Moreover, the selling in the greenback across the board is also driven by the USD/JPY sell-off, after the Yen rallied hard on the reports that the BoJ reduced the JGBs purchases for today. However, it remains to be seen if the major can sustain the minor-recovery mode, as markets believe that the extension of the correction in the EUR is imminent, given its recent rally to near its 2017 peak of 1.2092.
Also, downbeat German factory orders data could continue to weigh on the common currency, as attention now shifts towards the German industrial production and trade data due on the cards ahead of the European open. Markets also look forward to the second-liner employment data from both continents for further momentum on the prices.
EUR/USD Technical Levels
FXStreet’s Chief Analyst, Valeria Bednarik notes: “According to technical readings in the 4 hours chart, the decline could continue given that the price is well below a now bearish 20 SMA, whilst technical indicators maintain their strong bearish slopes near oversold territory. The slide seems so far corrective and could continue to be so even if the pair falls down to 1.1920, the 50% retracement of the same decline, although a break below this last will put an interim top in place, and imply a downward continuation toward the 1.1660 price zone. Support levels: 1.1955 1.1920 1.1880. Resistance levels: 1.2000 1.12030 1.2065.”
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
EUR/USD stays in positive territory above 1.0850 after US data
EUR/USD clings to modest daily gains above 1.0850 in the second half of the day on Friday. The improving risk mood makes it difficult for the US Dollar to hold its ground after PCE inflation data, helping the pair edge higher ahead of the weekend.
GBP/USD stabilizes above 1.2850 as risk mood improves
GBP/USD maintains recovery momentum and fluctuates above 1.2850 in the American session on Friday. The positive shift seen in risk mood doesn't allow the US Dollar to preserve its strength and supports the pair.
Gold rebounds above $2,380 as US yields stretch lower
Following a quiet European session, Gold gathers bullish momentum and trades decisively higher on the day above $2,380. The benchmark 10-year US Treasury bond yield loses more than 1% on the day after US PCE inflation data, fuelling XAU/USD's upside.
Avalanche price sets for a rally following retest of key support level
Avalanche (AVAX) price bounced off the $26.34 support level to trade at $27.95 as of Friday. Growing on-chain development activity indicates a potential bullish move in the coming days.
The election, Trump's Dollar policy, and the future of the Yen
After an assassination attempt on former President Donald Trump and drop out of President Biden, Kamala Harris has been endorsed as the Democratic candidate to compete against Trump in the upcoming November US presidential election.