EUR/USD advances to mid-1.0500s on softer US Dollar
Updated
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Today, with the stronger US dollar, the EUR/USD pair has been pushed down from its weekly high of 1.0630 to 1.0520. Economic data from the United States reflects that the fundamental factors still support the Greenback and combined with higher interest rates, it has put downward pressure on this currency pair.
The reversal of EUR/USD is occurring near an important resistance level, marking a break below the lower limit of the upward channel. Technical indicators on the 4-hour chart indicate that the exchange rate will continue to decrease, but the pair is currently near the support level of 1.0520. Below that area, the next support level is 1.0500.
If consolidation occurs below the 1.0490 level, it will increase selling pressure and reveal a level of 1.0460, slightly higher than the lowest level in October.
Today, with the stronger US dollar, the EUR/USD pair has been pushed down from its weekly high of 1.0630 to 1.0520. Economic data from the United States reflects that the fundamental factors still support the Greenback and combined with higher interest rates, it has put downward pressure on this currency pair.
The reversal of EUR/USD is occurring near an important resistance level, marking a break below the lower limit of the upward channel. Technical indicators on the 4-hour chart indicate that the exchange rate will continue to decrease, but the pair is currently near the support level of 1.0520. Below that area, the next support level is 1.0500.
If consolidation occurs below the 1.0490 level, it will increase selling pressure and reveal a level of 1.0460, slightly higher than the lowest level in October.
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Note
A bullish opening in Wall Street could make it difficult for the USD to find demand. On the other hand, EUR/USD could turn south in case investors continue to price in a stronger probability of one more 25 basis points Federal Reserve rate hike before the end of the year.Note
Early Friday, US stock index futures trade modestly higher on the day. In the absence of high-impact macroeconomic data releases, the risk perception could impact the USD's valuation and drive EUR/USD's action ahead of the weekend.Note
Note
Long-term bond yields continued to rise after the September meeting. The Bund was up by nearly 40bp until early October, driven by a combination of a supply/demand mismatch, inflation concerns and fears of ‘higher-for-longer’.Note
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