- EUR/USD takes offers to refresh intraday low, extends the previous day’s losses.
- US Dollar Index picks up bids amid mixed sentiment, upbeat yields.
- Fears of US debt default, hawkish Fed speak supersede indecisive quarterly bank survey outcome to propel US Dollar.
- Risk catalysts eyed amid light calendar ahead of Wednesday’s US CPI.
EUR/USD holds onto the week-start losses as Euro bears prod a 1.1000 round figure, down 0.17% intraday near 1.0990 during early Tuesday. In doing so, the major currency pair takes clues from the market’s mixed sentiment and the US Dollar rebound, as well as recently softer Eurozone data.
That said, the US Dollar Index (DXY) extends the previous day’s rebound amid firmer yields and mixed signals surrounding inflation and banking conditions. The benchmark US 10-year Treasury bond yields rose in the last three consecutive days to 3.51% at the latest whereas the US inflation expectations as per the 10-year and 5-year breakeven inflation rates from the St. Louis Federal Reserve (FRED) data jumped to a one-week high the previous day.
Elsewhere, the Federal Reserve’s (Fed) quarterly bank loan survey showed tighter standards and weaker demand for commercial and industrial (C&I) loans to large and middle-market firms, as well as small firms, over the first quarter.
Furthermore, unimpressive comments from Chicago Federal Reserve Bank President Austan Goolsbee and US Treasury Secretary Janet Yellen's fears of US default weigh on the EUR/USD price, especially amid recently downbeat EU data.
On Monday, German Industrial Production for March slumped to -3.4% MoM versus -1.0% expected 2.1% prior. Further, the Eurozone Sentix Investor Confidence also deteriorated to -13.1 for May from -8.7 prior and -8.0 market forecasts.
It’s worth noting that European Central Bank chief economist Philip Lane said that there was "a lot of disinflation" coming later this year but added that there was still "a lot of momentum" in inflation. His comments also exert downside pressure on the EUR/USD price amid mildly offered S&P 500 Futures.
Moving on, a light calendar emphasizes the need to look out for risk catalysts while forecasting the EUR/USD moves.
Technical analysis
Given the higher low of the EUR/USD price joining higher RSI (14), the major currency pair is likely to regain upside momentum. The same highlights a three-week-old bullish channel, currently between 1.0960 and 1.1180, as the key challenge for the Euro bears to conquer before taking control.
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 holds steady near 0.6250 ahead of RBA Minutes
The AUD/USD pair trades on a flat note around 0.6250 during the early Asian session on Monday. Traders brace for the Reserve Bank of Australia Minutes released on Monday for some insight into the interest rate outlook.
USD/JPY consolidates around 156.50 area; bullish bias remains
USD/JPY holds steady around the mid-156.00s at the start of a new week and for now, seems to have stalled a modest pullback from the 158.00 neighborhood, or over a five-month top touched on Friday. Doubts over when the BoJ could hike rates again and a positive risk tone undermine the safe-haven JPY.
Gold: Is another record-setting year in the books in 2025?
Gold benefited from escalating geopolitical tensions and the global shift toward a looser monetary policy environment throughout 2024, setting a new all-time high at $2,790 and rising around 25% for the year.
Week ahead: No festive cheer for the markets after hawkish Fed
US and Japanese data in focus as markets wind down for Christmas. Gold and stocks bruised by Fed, but can the US dollar extend its gains? Risk of volatility amid thin trading and Treasury auctions.
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.