• EUR/USD is adding to Friday’s gains in the vicinity of the critical barrier at 1.1200 the figure.
  • Speculations of a rate cut by the Federal Reserve keep weighing on the buck and are bolstering the upside in spot.
  • US ISM manufacturing will be the salient event later in the session.

EUR/USD is prolonging the upside momentum sparked at the end of last week and is approaching the key 1.1200 mark on Monday, as market participants continue to adjust to the probability of a rate cut by the Federal Reserve in the not-so-distant future. This scenario is propped up by the inversion of the US yield curve, while the absence of traction in inflation figures and some weakness seen in recent indicators have been also collaborating with this view.

In addition, recent threats from President Trump to impose tariffs on all of US imports from Mexico have added concerns to the prospects of a global slowdown, at the same time sustaining the rally in bonds and dragging global yields to fresh lows.

This upbeat note surrounding the European currency should be transitory, however, as a move on rates appears quite distant in the Fed’s horizon, as per recent Fedspeak, and on the back of solid labour market, temporary lack of upside traction in consumer prices and still healthy economy. If we add the safe haven appeal of the buck, broad G10 central banks’ dovish tilt vs. the Fed, weakness in US rival economies and the status of global reserve currency, it all signals a continuation of the constructive outlook on the greenback.

In the technical universe, the 55-day SMA at 1.1220 emerges as the immediate target in case EUR/USD gains further upside momentum. This important area of resistance is reinforced by a Fibo retracement of the 2019 drop as well as May’s peaks. However, while the 8-month resistance line continues to cap the upside, another test of the 1.1100 neighbourhood should remain well on the cards in the near to medium term.

 

 

 

 

 

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.

Analysis feed

Latest Forex Analysis

Editors’ Picks

EUR/USD consolidating its losses amid Brexit and trade uncertainty

EUR/USD is off the weekly highs but holds onto 1.11 amid uncertainty about the Brexit process and doubts that the US and China can reach a deal. Tension toward the ECB meeting mounts.

EUR/USD News

GBP/USD attempting to recover after parliament slowed down the Brexit process

GBP/USD is moving up toward 1.29, trying to recover after parliament rejected the fast-track process that PM Johnson wanted for approving his Brexit deal. An extension to Article 50 and elections are on the cards.

GBP/USD News

USD/JPY struggles below mid-108.00s, over one-week lows

The Greenback held weaker against its Japanese counterpart, with the USD/JPY pair struggling below mid-108.00s, or over one-week lows set earlier this Wednesday.

USD/JPY News

Cryptocurrencies price prediction: Bitcoin Cash, Ethereum & IOTA

The crypto market is bleeding across the board. Major cryptos like Bitcoin and Ethereum fall overnight while Bitcoin Cash engaged the reverse gear during Wednesday’s European session.

Read more

Gold: Clings to gain near the top end of 2-week old trading range

Gold gained some follow-through traction for the second consecutive session on Wednesday and is currently placed at the top end of a near two-week-old trading range.

Gold News

Forex Majors

Cryptocurrencies

Signatures