- EUR/USD seesaws above a three-week-old previous resistance line after two-week uptrend.
- Market’s anxiety ahead of the top-tier EU data, FOMC keeps traders on the edge.
- Risk-negative headlines, firmer yields challenge buyers as DXY grinds higher.
- Bears will look for Eurozone recession to take entries but Fed’s favor for slower rate hike may keep buyers hopeful.
EUR/USD struggles for clear directions while trading inside a 20-pip range surrounding 0.9950 during early Monday. In doing so, the major currency pair portrays the market’s anxiety ahead of the key eurozone data and the Federal Open Market Committee (FOMC) meeting announcements.
That said, Friday’s US inflation data teased EUR/USD sellers but the underlying details suggest that there is room for the Fed to discuss easy rate hikes from December onwards, which in turn challenge the pair’s downside moves.
Also, the US 10-year Treasury yields seesaw near 4.00% after snapping the 10-week uptrend by the end of Friday. Additionally testing the EUR/USD traders are the mixed moves of the equities as the US equity future prints mild losses even after Dow Jones braces for the biggest monthly jump since 1976.
Talking above the risk-negative catalysts, news of Macau’s lockdown of a casino resort and fears emanating from Russia gain major attention during a sluggish session. “Russia, which invaded Ukraine on Feb. 24, halted its role in the Black Sea deal on Saturday for an ‘indefinite term’ because it could say it could not ‘guarantee the safety of civilian ships’ traveling under the pact after an attack on its Black Sea fleet,” reported Reuters. On the other hand, the concerns that the Fed might discuss slowing down on the rate hikes from December seem to challenge the pair buyers of late.
Looking forward, the first readings of the Eurozone’s third quarter (Q3) Gross Domestic Product, expected to ease to 0.2% versus 0.8% prior, as well as the October month’s HICP, likely to soften to 0.6% MoM compared to 1.2% prior, will be important for immediate directions. The reasons could be linked to the growing fears of economic recession in the bloc, which if confirmed could weigh on the EUR/USD prices.
It should, however, be noted that the Fed’s move will be more important for clear directions as talks over the US central bank’s easing on the further rate increases, currently expected to have 0.75% rate lift, could renew the EUR/USD pair’s upside moves.
Technical analysis
Given the bearish MACD signals and the downbeat RSI (14), not oversold, the EUR/USD prices are likely to extend the previous day’s downside break of the one-week-old ascending trend line, as well as the 21-SMA.
Hence, EUR/USD sellers could wait for a successful break of the 0.9960 immediate support line, previous resistance, for conviction. Following that, a downward trajectory towards an upward-sloping trend line from September 27, close to 0.9755, appears more likely. During the fall, the 50% and 38.2% Fibonacci retracement level of the pair’s September-October downside, near 0.9870 and 0.9790 in that order, will be crucial intermediate levels to watch.
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 below 1.1100, looks to post weekly losses](https://editorial.fxstreet.com/images/Markets/Currencies/Majors/EURUSD/european-euro-coin-on-top-of-american-dollar-bill-11292130_XtraSmall.jpg)
EUR/USD stays below 1.1100, looks to post weekly losses
EUR/USD continues to trade in a narrow range below 1.1100 and remains on track to end the week in negative territory. Earlier in the day, monthly PCE inflation data from the US came in line with the market expectation, failing to trigger a reaction.
![GBP/USD struggles to find a foothold, trades near 1.3150](https://editorial.fxstreet.com/images/Markets/Currencies/Majors/GBPUSD/iStock-157771037_XtraSmall.jpg)
GBP/USD struggles to find a foothold, trades near 1.3150
GBP/USD stays on the back foot and trades in negative territory at around 1.3150 on Friday. The US Dollar holds its ground following the July PCE inflation data and doesn't allow the pair to stage a rebound heading into the weekend.
![Gold retreats toward $2,500 ahead of the weekend](https://editorial.fxstreet.com/images/Markets/Commodities/Metals/Gold/gold-bars-50657756_XtraSmall.jpg)
Gold retreats toward $2,500 ahead of the weekend
Gold stays under modest bearish pressure and declines toward $2,500 in the American session on Friday. The 10-year US Treasury bond yield edges higher toward 3.9% after US PCE inflation data, causing XAU/USD to stretch lower.
![Week ahead – Investors brace for NFP amid Fed rate cut speculation](https://editorial.fxstreet.com/images/Macroeconomics/EconomicIndicator/Employment/NFP/america-back-to-work-gm178972493-25143312_XtraSmall.jpg)
Week ahead – Investors brace for NFP amid Fed rate cut speculation
Here comes another NFP week, with investors eagerly awaiting the results as they try to discern the size and pace of the Fed’s forthcoming rate cuts. The weaker than expected July numbers triggered market turbulence, instilling fears about a potential recession in the US.
![Easing Eurozone inflation to back an ECB rate cut in September](https://editorial.fxstreet.com/images/Macroeconomics/Countries/Europe/Eurozone_countries/Eurozone/eu-flags-flying-at-the-european-commission-building-brussels-belgium-24759579_XtraSmall.jpg)
Easing Eurozone inflation to back an ECB rate cut in September Premium
Eurostat will publish the preliminary estimate of the August Eurozone Harmonized Index of Consumer Prices on Friday, and the anticipated outcome will back up the case for another European Central Bank interest rate cut when policymakers meet in September.
![Moneta Markets review 2024: All you need to know](https://editorial.fxstreet.com/images/IT/Testing/Review/FXSBadgeCertifiedBackg_XtraSmall.png)
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.