EUR/USD Current Price: 0.9796

  • EU confrontation with Russia takes its toll on households and businesses.
  • Inflation under scrutiny on Friday as the US and the EU will release updated data.
  • EUR/USD battling with a Fibonacci resistance level at around 0.9790.

The EUR/USD pair reached a fresh weekly high of 0.9801, hovering around 0.9790 at the end of the day. The American dollar enjoyed some market favor ahead of the US opening but came under strong selling interest afterward.

The shared currency advanced despite persistent tensions between the Union and Moscow over gas deliveries. After the suspected sabotage of the Nord Stream pipelines, Germany launched a relief package in response to higher gas and electricity prices. At the same time, Hungary announced it would not support new energy sanctions on Russia.

Data-wise, macroeconomic data was far from EUR-supportive. The EU Economic Sentiment Indicator printed 93.7 in September, missing the 95 expected. Furthermore, German inflation kept pushing higher in September, as the Harmonized Consumer Price Index rose at an annual pace of 10.9%, according to preliminary estimates.

US figures were a bit more encouraging, as the country published the final estimate of the Q2 Gross Domestic Product, which was confirmed at -0.6% in the three months to June, in line with a technical recession. Also, Initial Jobless Claims for the week ended September 23 improved to 193K from 209K in the previous week.

Friday will bring German August Retail Sales and the Import Price Index and the preliminary estimate of the EU Consumer Price Index for September. On the other hand, the US will publish the core PCE Price Index for August, foreseen rising by 4.7% YoY, and the final reading of the September Michigan Consumer Sentiment Index.

EUR/USD short-term technical outlook

The EUR/USD pair extended its advance for the second day in a row, now trading at around the 38.2% retracement of its latest decline between 1.0197 and 0.9535 at around 0.9790. Technical readings in the daily chart still suggest the upside is limited. The 20 SMA extended its downward slope and remains above the current level, while below firmly bearish longer ones.

The 4-hour chart shows that the pair advanced further above a mildly bullish 20 SMA, while the longer moving averages decelerate their declines, still far above the current level. Technical indicators reached fresh weekly highs before losing their bullish strength, now consolidating near overbought readings. The corrective advance could continue in the near term, should the pair clear the aforementioned Fibonacci resistance level.

Support levels: 0.9740 0.9690 0.9650

Resistance levels: 0.9835 0.9880 0.9925

View Live Chart for the EUR/USD

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