The euro managed to erase weekly losses and it was trading at the same level it closed a week ago. EUR/USD recovered most of the losses that followed the FOMC statement. The latest economic data from the US did not help the USD, while in Europe a higher than expected inflation reading for October gave support to the EUR.
From the fundamental perspective, today’s data from the US include: Personal Income and Spending (September) and the Employment Cost Index (3Q). The employment index generated a big impact on the US dollar a few months ago, gaining attention since then. Good data could boost greenback in the market, while a negative surprise could reduce expectations of a Federal Reserve rate hike in December.
View the Live chart of the EUR/USD
Technically the pair is moving to the upside, recovering from 1.0895, with indicators pointing higher, but not showing much strength, signaling some vulnerability. Currently is attempting to rise on top of 1.1000. Above 1.1020 the recovery could gain momentum while then a strong resistance zone is seen between 1.1070 and 1.1090 that is likely to cap the upside. EUR/USD will need a big push to break higher; if it consolidates above 1.1100, it would clear the way toward the daily 20-SMA, located at 1.1210/30.
Despite the bullish correction, the pair still holds a bearish bias, after breaking a key uptrend line last week. The level to watch for the next hours stands around 1.0970/80 (hourly uptrend line originated at Thursday’s lows), a break lower would weaken the intraday outlook for the euro. The next support is seen at 1.0940, ahead of 1.0900. Below, the bearish pressure could rise and a test of the major static support at 1.0840 could be seen.
Latest updates on the EUR/USD Forecast
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