|

EUR/USD ticks higher amid subdued USD demand, remains below 1.0900 mark

  • EUR/USD attracts fresh buyers on Wednesday amid a modest USD downtick.
  • Fed rate cut bets keep the US bond yields depressed and undermine the buck.
  • Wednesday’s US data might provide some impetus ahead of the ECB on Thursday.

The EUR/USD pair builds on the overnight bounce from the 1.0860-1.0855 region and ticks higher during the Asian session on Wednesday amid subdued US Dollar (USD) price action. Spot prices currently trade just below the 1.0900 mark and remain well within the striking distance of the highest level since March 21 touched on Tuesday. 

The incoming softer US macro data pointed to signs of a cooling economy and cemented bets for an imminent interest rate cut by the  Federal Reserve (Fed) later this year. The expectations keep the US Treasury bond yields depressed and undermine the USD, which, in turn, is seen lending some support to the EUR/USD pair. The upside, however, seems limited as traders might prefer to wait on the sidelines ahead of the crucial European Central Bank (ECB) monetary policy meeting on Thursday. 

As widely signalled in recent weeks by policymakers, the ECB is more likely to cut interest rates by 25 basis points at the end of its June 6 meeting. This will mark the first cut since March 2016 and will be accompanied by the latest economic projections. This, along with comments by ECB President Christine Lagarde will be scrutinized for cues about future rate cuts on the back of a rise in Eurozone inflation in May. This, in turn, will play a key role in driving the shared currency and the EUR/USD pair.

The market attention will then shift to the release of the closely-watched US monthly employment details, popularly known as the Nonfarm Payrolls (NFP) report on Friday. The crucial US jobs data might influence expectations about the Fed's next policy move and the USD. Heading into the key central bank event and US macro data risks, Wednesday's US economic docket, featuring the ADP report and ISM Services PMI,  might produce short-term opportunities around the EUR/USD pair.

EUR/USD

Overview
Today last price1.0882
Today Daily Change0.0003
Today Daily Change %0.03
Today daily open1.0879
 
Trends
Daily SMA201.0835
Daily SMA501.0775
Daily SMA1001.0808
Daily SMA2001.0788
 
Levels
Previous Daily High1.0916
Previous Daily Low1.0859
Previous Weekly High1.0889
Previous Weekly Low1.0788
Previous Monthly High1.0895
Previous Monthly Low1.065
Daily Fibonacci 38.2%1.0881
Daily Fibonacci 61.8%1.0894
Daily Pivot Point S11.0854
Daily Pivot Point S21.0828
Daily Pivot Point S31.0797
Daily Pivot Point R11.091
Daily Pivot Point R21.0942
Daily Pivot Point R31.0967

Author

Haresh Menghani

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

More from Haresh Menghani
Share:

Editor's Picks

AUD/USD consolidates above 0.7000 as RBA hike bets support amid softer USD

AUD/USD steadies above 0.7000 in Friday’s Asian session, stalling the overnight pullback from a one-month top as RBA rate-hike expectations act as a tailwind for the Aussie. Moreover, the US Dollar remains on the back foot amid hopes of Iran diplomacy, further supporting the currency pair. However, geopolitical risks and hawkish Fed expectations limit USD losses.

USD/JPY flatlines near 157.70 after hot Tokyo CPI as focus remains on BoJ

USD/JPY consolidates around 157.70 during the Asian session on Friday, moving little following the release of hot Tokyo CPI as focus remains on the highly anticipated BoJ rate decision. Meanwhile, upside remains capped as the US Dollar stays depressed amid the Euro's post-ECB rise. However, Thursday's US macro data reaffirmed Fed hike bets, which, along with geopolitical uncertainties, support the buck and the currency pair.

Gold falls to near $4,000 as US PCE data reinforces December Fed hike odds

Gold price falls to around $4,015 during the early Asian session on Friday. The precious metal loses ground as US inflation data reinforced expectations ‌of a Federal Reserve interest rate hike later this year.

Bank of Japan to leave interest rates steady at 1.25%

The Bank of Japan is set to announce its monetary policy decision on Friday at around 02:30 GMT. Like the Federal Reserve, financial markets are confident that the BoJ will leave interest rates unchanged, after raising them by 25 basis points to 1.25% in the September policy meeting. This is the highest interest rate level seen in 31 years in Japan.

Ethereum dips as US PCE inflation reinforces December rate hike

Ethereum fell below $2,300, down 4.8% on Thursday following a rise in US Personal Consumption Expenditure inflation. The PCE Price Index climbed 0.5% MoM and 3.6% YoY in September, matching market forecasts. Core PCE, which excludes volatile energy and food prices, increased by 0.3% monthly and 3.1% yearly, also in line with expectations.

A hot US economy is supposed to sink Gold. It didn't. Here's why
Gold (XAU/USD) remains under pressure near $4,000, as stronger-than-expected United States (US) economic data reinforce expectations of another Federal Reserve (Fed) interest rate hike in December. Economic growth is accelerating, inflation remains elevated, and borrowing costs could rise further.