EUR/USD analysis: dollar surges on run to safety
|EUR/USD Current price: 1.1342
- Plummeting US Treasury yields and equities spurred demand for the greenback.
- EUR may suffer from growth data this Wednesday.
The EUR/USD pair traded as high as 1.1418 this Tuesday, although once again, it was unable to hold on to gains above the 1.1400 mark, turning negative for the day in US trading hours. The positive momentum in high-yielding assets triggered by weekend news related to the trade war was faded throughout the day, with most major indexes closing in the red. And that came after US President Trump's confident tweet about trade talks going underway. US Treasury yields eased from their highs, despite Fed's speakers sounded more confident than the gloomy chief Powell, as Williams said that he sees further gradual hikes over "the next year or so," adding that the Fed could change forward guidance but that the dot-plot will remain. Softening yields were behind Wall Street's fall, amid renewed concerns of a yield-curve inversion, a sign of economic slowdown. Contradictory that fears of a US slowdown end up strengthening the greenback.
The macroeconomic calendar didn't provide clues, as only minor data was out. The EU released October PPI, which rose by 0.8% when compared to the previous month and by 4.9% from a year earlier, while the US informed the ISM-NY Business Conditions Index, down to 67.8 from the previous 69.8, and the IBD/TIPP Economic Optimism Index, also disappointing, down to 52.6 vs. the previous 56.5. This Wednesday will bring the final November Markit Services and Composite indexes for both economies and EU October Retail Sales.
The EUR/USD pair fell to 1.1317 bouncing just modestly from the level to stabilize around the 1.1330 price zone. The failed attempt to advance beyond the 1.1420/30 region is quite discouraging for bulls, which may give up on a break below the 1.1300/10 price zone. Meanwhile, and heading into the Asian opening, the pair is bearish short-term, given that in the 4 hours chart, it has broken below all of its moving averages with a large candle indicating strong downward momentum, as technical indicators resumed their slides within negative levels, now at fresh daily lows.
Support levels: 1.1315 1.1290 1.1260
Resistance levels: 1.1365 1.1400 1.1430
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