EUR/USD analysis: when do you think ECB's officers will start jawboning?

Valeria Bednarik FXStreet

EUR/USD Current price: 1.1900

Daily pullback hardly affecting the trend.
ECB's officers not showing signs of concerns about EUR's strength… yet.

Action around the EUR/USD pair was limited at the beginning of the week, with the pair confined to a tight trading range. Nevertheless, the pair set a fresh multi-week high of 1.1960 before retreating to the current 1.1900 region, as dollar's weakness was the main theme of the day. There were no macroeconomic releases coming from the EU and that from the US was mixed, with New Home Sales rose in October 6.2%, to 0.685M, well above the 0.625M expected. The Dallas Fed manufacturing index for November, however, came below expected at 19.4 in November from previous 27.6 and market's forecast of 24.0, indicating anyway solid economic expansion.

This Tuesday the macroeconomic calendar will have plenty of minor figures to offer and a couple of FOMC officers will hit the wires, which will add to later inflation figures, ahead of Fed's December decision. The EUR/USD pair recent rally has been mostly amid dollar's weakness, with the pair now stabilizing above pre-ECB's levels. The European Central Bank has been working hard to keep the common currency in check, as a continued appreciation will play against inflation and growth progress, so necessary now that the Central Bank is trimming its bond-buying program, on hopes to reach normalization in the near future. This recovery surely is not welcome by ECB's authorities, but after acting last month, they have now little room to maneuver, beyond some jawboning. A dollar's recovery, on market's conviction that the Fed will maintain the tightening path through 2018 is what they need, and that still looks blurry.

Technically and for the upcoming sessions, the pair retains the bullish stance despite the modest daily pullback, as in the 4 hours chart, technical indicators have managed to correct extreme overbought conditions, but remain well into positive territory, with the RSI around 62 indicating a limited downward strength. In the same chart, the 20 SMA maintains its bullish slope around 1.1870, reinforcing the view. The 1.1890 region is the immediate support, en route to 1.1860, while only below 1.1820 bulls will lose hope, handing the grip to bears.

Support levels: 1.1890 1.1860 1.1825

Resistance levels: 1.1960 1.2000 1.2045

View Live Chart for the EUR/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

GBP/USD advances to three-month peak beyond 1.3600

GBP/USD extends its daily rally and trades at its highest level since mid-May above 1.3600. The US Treasury Department decision to double the sice of liquidity support buyback operations for longer-dated nominal coupon securitiez weighs heavily on the US Dollar and helps the pair push higher. Earlier in the day, the data from the UK showed that annual Consumer Price Index (CPI) inflation picked up to 2.9% in July, meeting estimates, while core CPI rose by 2.6% YoY in July versus 2.5% expected.

EUR/USD surges to 11-week high above 1.1650 after US Treasury announcement

EUR/USD gathers bullish momentum and trades at its highest level since early June above 1.1650 on Wednesday. The US Dollar stays under heavy bearish pressure after the US Treasury announced that it will increase the size of liquidity support buyback operations for longer-dated nominal coupon securities. Later in the day, investors will scrutinize FOMC Minutes for fresh clues on policy outlook.

Gold pulls back from 11-week highs, battles $4,500

Gold eases from its highest level since early June, battling $4,500 in the Asian session on Thursday. The US Dollar draws some support from the US-Iran standoff and hawkish FOMC Minutes, capping the upside for the bullion. Gold short through the roof on Wednesday after the US Treasury Department stepped in to provide relief to bond markets, leading to a sharp decline in yields and boosting the non-yielding yellow metal.

HYPE soars 20% as Trump signals efforts to bring Hyperliquid to US market in White House meeting

Hyperliquid surged over 20% on Wednesday after President Donald Trump said the Commodity Futures Trading Commission is working to bring the decentralized perpetual futures platform into the US.

$20 billion offered, $2 billion taken: Why Treasury doubled its buyback cap

The US Treasury moved off its own calendar on Wednesday, and that is the part worth sitting with. At 12:32 GMT, the department said it would at least double the size of liquidity support buyback operations in the 10-year to 20-year and 20-year to 30-year sectors, lifting the maximum from $2 billion per operation to at least $4 billion, effective September 9 and running to November 4.

Why is Crude Oil priced for a reopening the ships haven't made?

Fourteen vessels crossed the Strait of Hormuz on Tuesday. Before the war, the count ran near 120 a day. In the sessions since the waterway was publicly declared open, Brent has drifted back to $87 and West Texas Intermediate (WTI) to $81, both a little lower again on Wednesday, with daily momentum on each unwound from the top of its range in late July to the low twenties now.