- EUR/USD loses further the grip and reaches 1.1550.
- The dollar regains ground and weighs on the risk complex.
- EMU Retail Sales, US ADP report next of note later.
Sellers regained control of the sentiment around the single currency and now force EUR/USD to clock fresh 2021 lows in the 1.1555/50 band.
EUR/USD weaker on dollar recovery
EUR/UD adds to Tuesday’s losses and navigates near the 1.1550 region midweek on the back of another bout of buying pressure in the greenback, which is in turn propped up by rising US yields.
Indeed, yields of the US 10-year benchmark note passed the 1.57% yardstick on Wednesday, the highest level since mid-June, while the 2-year note gradually approaches the 0.30% mark.
In the euro docket, Retail Sales in the broader Euroland are due later, while the ADP Report will take centre stage across the pond seconded by MBA’s Mortgage Applications and the speech by FOMC’s R.Bostic.
What to look for around EUR
EUR/USD gave away recent gains and reversed the upside to 1.1640 seen earlier in the week to re-focus instead on the opposite direction and on a potential test of the 1.1500 neighbourhood in the not-so-distant future. The firmer tone in the buck along with higher US yields continue to undermine the performance of the risk universe, while the growth outlook appears under pressure on rising speculations that the inflation could take longer to reverse the ongoing elevated levels. In addition, the likely loss of momentum in the economic recovery, as per some weakness seen in key fundamentals, also caps the upside potential in the pair.
Key events in the euro area this week: EMU Retail Sales (Wednesday) – ECB Accounts (Thursday) – German Balance of Trade (Friday).
Eminent issues on the back boiler: Asymmetric economic recovery in the region. Sustainability of the pick-up in inflation figures. Progress of the Delta variant of the coronavirus and pace of the vaccination campaign. Probable political effervescence around the EU Recovery Fund. Investors’ shift to European equities in the wake of the pandemic could lend extra oxygen to the single currency. ECB tapering speculations.
EUR/USD levels to watch
So far, spot is losing 0.33% at 1.1558 and faces the next up barrier at 1.1640 (weekly high Oct.4) followed by 1.1703 (20-day SMA) and finally 1.1755 (weekly high Sep.22). On the other hand, a break below 1.1553 (2021 low Oct.6) would target 1.1500 (round level) en route to 1.1495 (high Mar.9 2020).
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 clings to recovery gains near 1.0850 ahead of Fedspeak
EUR/USD trades in positive territory near 1.0850 on Friday following a four-day slide. China's stimulus optimism and a broad US Dollar correction help the pair retrace the dovish ECB decision-induced decline. All eyes remain on the Fedspeak.
GBP/USD pares UK data-led gains at around 1.3050
GBP/USD is trading at around 1.3050 in the second half of the day on Friday, supported by upbeat UK Retail Sales data and a pullback seen in the US Dollar. Later in the day, comments from Federal Reserve officials will be scrutinized by market participants.
Gold at new record peaks above $2,700 on increased prospects of global easing
Gold (XAU/USD) establishes a foothold above the $2,700 psychological level on Friday after piercing through above this level on the previous day, setting yet another fresh all-time high. Growing prospects of a globally low interest rate environment boost the yellow metal.
Crypto ETF adoption should pick up pace despite slow start, analysts say
Big institutional investors are still wary of allocating funds in Bitcoin spot ETFs, delaying adoption by traditional investors. Demand is expected to increase in the mid-term once institutions open the gates to the crypto asset class.
Canada debates whether to supersize rate cuts
A fourth consecutive Bank of Canada rate cut is expected, but the market senses it will accelerate the move towards neutral policy rates with a 50bp step change. Inflation is finally below target and unemployment is trending higher, but the economy is still growing.
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.