EUR/USD finds support but remains inside woods after weak US Job Openings data

• EUR/USD remains below 1.0800 amid cautions ahead of an array of macroeconomic data from the US and the Eurozone this week.
• US JOLTS Job Openings came in lower than estimates in September.
• Traders doubt over the size of the ECB’s likely interest rate cut in December.

EUR/USD discovers buying interest below 1.0800 in Tuesday’s North American session after the release of the weaker-than-expected United States (US) JOLTS Job Openings data for September. The report showed that job vacancies came in at 7.443 million, lower than estimates of 7.99 million and the August release of 7.861 million, downwardly revised from 8.04 million. Surprisingly lower vacancies data has pointed to weakness in the job market.

Weak job vacancy data has slightly weighed on the US Dollar (USD), however, it remains close to an almost three-month high, which keeps the major currency pair edgy.  The US Dollar Index (DXY), which tracks the Greenback's value against six major currencies, gives up some of its intraday gains after rising marginally above 104.60.

This week, investors will focus on an array of macroeconomic data to be released this week to get fresh cues about the Federal Reserve’s (Fed) interest-rate path for the remainder of the year. Market participants will pay close attention to the US Personal Consumption Expenditure Price Index (PCE) data for September, flash Q3 Gross Domestic Product (GDP), Nonfarm Payrolls, and ISM Manufacturing Purchasing Managers’ Index (PMI) data for October.

Economists expect the US economy to have created half of the jobs it added in September, the Manufacturing PMI to remain below the 50.0 threshold, inflation to have fallen slightly and the GDP to have expanded at a steady pace of 3% on an annualized basis.

Slower job growth would likely support market expectations for Fed interest rate cuts in December. Markets are pricing in a reduction in borrowing rates by 25 basis points (bps) in November and December, according to the CME FedWatch tool.

Daily digest market movers: EUR/USD will be influenced by US/Eurozone flash Q3 GDP data

• EUR/USD remains below 1.0800 in North American trading hours on Tuesday but still stays in a limited range from the last six trading days. The Euro (EUR) struggles for a direction as investors look for fresh cues about the size of the European Central Bank’s (ECB) likely interest rate cut in the last monetary policy meeting of the year in December.
• The ECB is widely anticipated to cut Its Deposit Facility Rate again but traders doubt whether the central bank will continue the rate-cut cycle with the usual pace of 25 basis points (bps) or go for a larger trim. Market expectations for an ECB large rate cut increased after a few officials highlighted the risks of inflation remaining below the desired rate of 2%.
• The likelihood of the German economy ending the year with an economic recession has been a major reason behind the doubts about low inflation. For more cues on German and Eurozone economic growth, investors will pay close attention to the flash Q3 GDP for both economies, which will be published on Wednesday.
• Economists estimate the German GDP to have contracted by 0.3% in Q3 compared with the same quarter a year earlier after remaining flat in Q2. In the same period, the Eurozone GDP is estimated to have expanded by 0.8%, faster than the former reading of 0.6%.
• On the same day, investors will also focus on the preliminary German and Spain Harmonized Index of Consumer Prices (HICP) data for October. Annual German HICP is expected to have grown at a faster rate of 2.1%, while inflation in Spain is estimated to have remained below 2%.

Technical Analysis: EUR/USD stays below 1.0800

EUR/USD faces pressure to sustain above the upward-sloping trendline near 1.0750, which is plotted from the October 3, 2023, low at around 1.0450 on the daily time frame. However, the broader outlook of the major currency pair remains bearish as it stays below the 200-day Exponential Moving Average (EMA), which trades around 1.0900.

The downside move in the shared currency pair started after a breakdown of a Double Top formation on the daily time frame near the September 11 low at around 1.1000, which resulted in a bearish reversal.

The 14-day Relative Strength Index (RSI) ticks up but remains in the 20.00-40.00 range, pointing to more downside ahead.

On the downside, the major pair could see more weakness towards the round-level support of 1.0700 if it slips below 1.0750. Meanwhile, the 200-day EMA near 1.0900 and the psychological figure of 1.1000 emerge as key resistances.