- 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 extends recovery beyond 1.0400 amid Wall Street's turnaround
EUR/USD extends its recovery beyond 1.0400, helped by the better performance of Wall Street and softer-than-anticipated United States PCE inflation. Profit-taking ahead of the winter holidays also takes its toll.
GBP/USD nears 1.2600 on renewed USD weakness
GBP/USD extends its rebound from multi-month lows and approaches 1.2600. The US Dollar stays on the back foot after softer-than-expected PCE inflation data, helping the pair edge higher. Nevertheless, GBP/USD remains on track to end the week in negative territory.
Gold rises above $2,620 as US yields edge lower
Gold extends its daily rebound and trades above $2,620 on Friday. The benchmark 10-year US Treasury bond yield declines toward 4.5% following the PCE inflation data for November, helping XAU/USD stretch higher in the American session.
Bitcoin crashes to $96,000, altcoins bleed: Top trades for sidelined buyers
Bitcoin (BTC) slipped under the $100,000 milestone and touched the $96,000 level briefly on Friday, a sharp decline that has also hit hard prices of other altcoins and particularly meme coins.
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.