- EUR/USD extends three-day losing streak to refresh six-week low.
- Strong US data, hawkish Fed talks favor upside momentum of US Dollar, Treasury bond yields.
- ECB Minutes, policymakers’ statements appear less hawkish and probe Euro bulls.
- Geopolitical fears add strength to the greenback’s haven demand and weigh on EUR/USD amid light calendar.
EUR/USD bears keep the reins around 1.0630, the lowest level in six weeks while portraying a three-day downtrend during early Friday.
The major currency pair’s latest fall seems akin to the broad US Dollar run-up and mixed clues from the European Central Bank (ECB) officials.
While printing the greenback’s run-up, the US Dollar Index (DXY) grinds near the 1.5-month top surrounding 104.30, marked earlier in Asia. In doing so, the US Dollar’s gauge versus the six major currencies cheers the hawkish concerns about the Federal Reserve’s (Fed) next move amid strong US data and upbeat comments from the Fed policymakers.
A slew of US statistics concerning inflation, employment and output underpin the force that pushes back the Fed’s policy pivot talks. The fashion could be witnessed in the latest comments from the Fed officials and the FEDWATCH tool, observed via Reuters.
At home, the ECB’s monthly bulletin and the latest comments from the policymakers, including executive board member Fabio Panetta and Chief Economist Philip Lane, signal the need for a cautious monetary policy move amid economic jitters.
Elsewhere, the recent fears of more US-China tussles over the spy balloon and Taiwan also bolster the US Dollar’s safe-haven demand, which in turn weighs on the EUR/USD price.
Against this backdrop, S&P 500 Futures mark 0.30% intraday losses to 4,086 while poking the weekly low after falling the most in a month on Thursday. Additionally, the US 10-year Treasury bond yields rise to a fresh high since December 30, 2022, whereas the two-year US Treasury bond also renews the highest levels since November 2022, making rounds to 3.88% and 4.68% in that order.
Moving on, a light calendar and the well-set hawkish Fed concerns, versus doubts over the ECB’s future rate hikes, the EUR/USD is likely to remain bearish ahead of next week’s monetary policy meeting minutes of the Federal Open Market Committee (FOMC).
Technical analysis
A clear downside break of the three-month-old support line, now resistance around 1.0710, joins the 50-day Exponential Moving Average (EMA) breakdown, close to 1.0675 at the latest, to keep EUR/USD bears hopeful of meeting the previous monthly low of 1.0483.
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.