- EUR/USD pares intraday gains during the second positive week since early November.
- Fedspeak shifts gears over inflation, ECB pushes for extended PEPP.
- US data stays firmer but Eurozone economics dwindle, yields lick wounds at 10-week low.
- Fedspeak, US Jobless Claims, Eurozone Unemployment Rate and Omicron news are the key ahead of Friday’s US NFP.
EUR/USD retreats from intraday high to 1.1325, consolidating daily gains to 0.12% ahead of Thursday’s European session.
Even so, the currency major pair stays on the recovery mode for the second consecutive week as the monetary policy battle between the European Central Bank (ECB) and the US Federal Reserve (Fed) seems to ease. Though, headlines concerning the South African covid variant and Friday’s US jobs report for November will be the key to a clear direction.
While Fed Chair Jerome Powell stepped back from conveying his inflation woes during the second day of testimony, ECB policymakers conveyed, per Reuters, worries over the likely monetary policy tightening in December. On the contrary, Federal Reserve Bank of New York President John C. Williams said, per New York Times, that Omicron could prolong supply and demand mismatches, causing some inflation pressures to last. Further, Cleveland Fed President Loretta Mester hints at speeding up the taper and likely rates in the next year, per Bloomberg.
It should be observed that the receding inflation fears and a two-month low print of the US inflation expectations, as measured by the 10-year breakeven inflation rate per the St. Louis Federal Reserve (FRED) data, weigh on the US Treasury yields. The same joins cautious optimism from China to help the stock futures and Asian stocks to lick their wounds.
However, the first Omicron case in the US pushed President Joe Biden’s administration to extend the rules for wearing a mask in public transit, the same seems to put a floor under the US 10-year Treasury yields around 1.42%.
Looking forward, weekly Initial Jobless Claims and a slew of Fed and ECB policymakers’ speeches may entertain EUR/USD traders but major attention will be given to the coronavirus news and Friday’s US Nonfarm Payrolls (NFP).
Technical analysis
Unless crossing a double-top figure surrounding 1.1385, comprising highs marked on November 16 and 30, EUR/USD bears stay hopeful to refresh the yearly low.
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 pares gains to near 1.0450 ahead of Germany's IFO survey
EUR/USD pares gains to trade near 1.0450 in European trading on Monday, moving back toward two-year lows of 1.0332. The renewed weakness is due to a modest recovery n the US Dollar and the US Treasury bond yields. The focus shifts to German data and ECB-speak.
GBP/USD pulls back toward 1.2550 as US Dollar sell-off pauses
GBP/USD is falling back toward 1.2550 in the European session on Monday after opening with a bullish gap at the start of a new week. A pause in the US Dollar decline alongside the US Treasury bond yields weighs down on the pair. Speeches from BoE policymakers are eyed.
Gold price manages to hold above $2,650 amid sliding US bond yields
Gold price maintains its heavily offered tone through the early European session on Monday, albeit manages to hold above the $2,650 level and defend the 100-period Simple Moving Average (SMA) on the 4-hour chart. Scott Bessent's nomination as US Treasury Secretary clears a major point of uncertainty for markets.
Bitcoin consolidates after a new all-time high of $99,500
Bitcoin remains strong above $97,700 after reaching a record high of $99,588. At the same time, Ethereum edges closer to breaking its weekly resistance, signaling potential gains. Ripple holds steady at a critical support level, hinting at continued upward momentum.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
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.