EUR/USD has breached the short-term corrective uptrend channel to the downside, and the broad downtrend is now to resume. The levels in the $1.2500 area have once again come in focus. Resistance is at $1.2740 and $1.2850.
The euro area released some better-than-expected data during the past week. German PMIs improved, so September decline may be explained by the spike in geopolitical risks. In addition, German 10-year yields are slightly above the US ones, and this is providing some support to EUR/USD.
However, the general sentiment about the euro area seems quite negative. The European Central Bank has started buying covered bonds, but right now no one thinks that this can really help to boost inflation. Moreover, the ECB will release the results of the banks’ stress tests on Sunday, and the possibility that the euro zone’s banking sector isn’t very healthy is rather high.
The new week is going to be volatile. Watch the releases of German Ifo business climate and the euro area’s flash October inflation data on Friday. In addition, the news from the US will likely shake the market. It now depends on this news: we’ll either see a bit more of consolidation or the return to October lows.
The euro area released some better-than-expected data during the past week. German PMIs improved, so September decline may be explained by the spike in geopolitical risks. In addition, German 10-year yields are slightly above the US ones, and this is providing some support to EUR/USD.
However, the general sentiment about the euro area seems quite negative. The European Central Bank has started buying covered bonds, but right now no one thinks that this can really help to boost inflation. Moreover, the ECB will release the results of the banks’ stress tests on Sunday, and the possibility that the euro zone’s banking sector isn’t very healthy is rather high.
The new week is going to be volatile. Watch the releases of German Ifo business climate and the euro area’s flash October inflation data on Friday. In addition, the news from the US will likely shake the market. It now depends on this news: we’ll either see a bit more of consolidation or the return to October lows.
Recommended Content
Editors’ Picks
EUR/USD clings to gains above 1.0750 after US data
EUR/USD manages to hold in positive territory above 1.0750 despite retreating from the fresh multi-week high it set above 1.0800 earlier in the day. The US Dollar struggles to find demand following the weaker-than-expected NFP data.
GBP/USD declines below 1.2550 following NFP-inspired upsurge
GBP/USD struggles to preserve its bullish momentum and trades below 1.2550 in the American session. Earlier in the day, the disappointing April jobs report from the US triggered a USD selloff and allowed the pair to reach multi-week highs above 1.2600.
Gold struggles to hold above $2,300 despite falling US yields
Gold stays on the back foot below $2,300 in the American session on Friday. The benchmark 10-year US Treasury bond yield stays in negative territory below 4.6% after weak US data but the improving risk mood doesn't allow XAU/USD to gain traction.
Bitcoin Weekly Forecast: Should you buy BTC here? Premium
Bitcoin (BTC) price shows signs of a potential reversal but lacks confirmation, which has divided the investor community into two – those who are buying the dips and those who are expecting a further correction.
Week ahead – BoE and RBA decisions headline a calm week
Bank of England meets on Thursday, unlikely to signal rate cuts. Reserve Bank of Australia could maintain a higher-for-longer stance. Elsewhere, Bank of Japan releases summary of opinions.