EUR/USD Forecast: Cautious buyers adding pressure
|EUR/USD Current Price: 1.0613
- Market concerns eased, although investors remain cautious ahead of first-tier events.
- The US 10-year Treasury note yield peaked at 5.02%, its highest since mid-2007.
- EUR/USD gains upward traction, facing immediate resistance at 1.0640.
The EUR/USD pair trades above the 1.0600 threshold as the market mood improved somehow. Investors welcomed headlines indicating Israel delayed a ground incursion into the Gaza Strip as authorities negotiate the release of hostages captured by Hamas. Weaker government bond yields maintained the US Dollar on the back foot, although resurgent yields ahead of Wall Street’s opening fell short of reverting the early trend.
The 10-year United States (US) Treasury note offered as much as 5.02% in pre-opening trading, its highest since July 2007, spurring concerns about the country’s economic progress. Yields are on an upward run after Federal Reserve (Fed) Chairman Jerome Powell said the central bank will continue working to bring inflation back to 2%, which, he added, remains “too high.”
Market players are also cautious ahead of first-tier events taking place this week. On the one hand, the European Central Bank (ECB) will decide on monetary policy next Thursday, while by the end of the week, the US will release the preliminary estimate of the Q3 Gross Domestic Product (GDP) and the September Personal Consumption Expenditures (PCE) Price Index.
The macroeconomic calendar was scarce this Monday. Germany’s Bundesbank released the monthly report, while the US unveiled the Chicago Fed National Activity Index, which improved to 0.02 in September from a revised -0.22 in the previous month. Later in the day, the Euro Zone will publish the preliminary estimate of October Consumer Confidence, previously at -17.8.
EUR/USD short-term technical outlook
The EUR/USD pair peaked at 1.0618 and trades nearby. The daily chart shows a higher high and a higher low, supporting another leg north. The risk skews to the upside, as the pair keeps developing above a flat 20 Simple Moving Average (SMA) while technical indicators grind north well above their midlines.
The 4-hour chart shows EUR/USD is currently crossing above a flat 200 SMA. after finding support around a mildly bullish 20 SMA earlier in the day. Technical indicators, in the meantime, advance within positive levels, also supporting an upward continuation. The pair faces resistance at 1.0640, the level to beat to confirm additional gains ahead.
Support levels: 1.0590 1.0545 1.0495
Resistance levels: 1.0640 1.0685 1.0720
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