- EUR/USD is finding buyers amid sluggish market conditions.
- Investors turn cautious amid US-Sino tensions, ahead of Fed minutes.
- The European energy crisis deepens as Germany’s Rhine river dry up.
EUR/USD is trading better bid above 1.0250, as buyers seemingly find support from a dismal market mood and sluggish US Treasury yields.
The US rates pause their upswing seen on Friday, as investors seek refuge in the government bonds and the dollar amid looming US-China risks after the former sent a delegation to Taiwan over the weekend even after the contentious visit by House Speaker Nancy Pelosi to the disputed island, which infuriated Beijing.
Further, rising odds of a 50 bps Fed rate hike in September, after easing US inflation pressures, weigh negatively on the yields, with all eyes on Wednesday’s FOMC minutes for fresh insights on the policy path of the world’s most powerful central bank.
Meanwhile, the US dollar is holding steady in early Asian trades, divided between the retreat in the yields and a tepid appetite for riskier assets. The US dollar index is trading flat at 105.61, having rebounded firmly to 105.88 last Friday. Stronger US Michigan Consumer Sentiment data and easing US inflation outlook triggered a sharp rally on the buck, despite solid performance on Wall Street.
On the EUR side of the equation, the gains in the shared currency will likely remain limited amid the deepening European energy crisis. Already, a cut in the Russian gas exports is severely impacting the old continent, with Germany being the worst hit. German economy could tip into a recession as sinking Rhine waters make shipping along the river harder.
Further up the river in Kaub, a noted bottleneck for shipping where the Rhine runs narrow and shallow, the reference level was forecast to go below 40 centimeters by the end of the week. It's worth noting that coal counts among key cargo moved on the waterway.
On the economic data front, Monday’s calendar is relatively data-scare on both sides of the Atlantic, with regard to the top-tier events. Therefore, the broader market sentiment and the dollar price action will continue to influence the main currency pair.
EUR/USD: Technical levels to watch
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 holds on to intraday gains after upbeat US data
EUR/USD remains in positive ground on Friday, as profit-taking hit the US Dollar ahead of the weekend. Still, Powell's hawkish shift and upbeat United States data keeps the Greenback on the bullish path.
GBP/USD pressured near weekly lows
GBP/USD failed to retain UK data-inspired gains and trades near its weekly low of 1.2629 heading into the weekend. The US Dollar resumes its advance after correcting extreme overbought conditions against major rivals.
Gold stabilizes after bouncing off 100-day moving average
Gold trades little changed on Friday, holding steady in the $2,560s after making a slight recovery from the two-month lows reached on the previous day. A stronger US Dollar continues to put pressure on Gold since it is mainly priced and traded in the US currency.
Bitcoin to 100k or pullback to 78k?
Bitcoin and Ethereum showed a modest recovery on Friday following Thursday's downturn, yet momentum indicators suggest continuing the decline as signs of bull exhaustion emerge. Ripple is approaching a key resistance level, with a potential rejection likely leading to a decline ahead.
Week ahead: Preliminary November PMIs to catch the market’s attention
With the dust from the US elections slowly settling down, the week is about to reach its end and we have a look at what next week’s calendar has in store for the markets. On the monetary front, a number of policymakers from various central banks are scheduled to speak.
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.