EUR/USD: Bears flirt with 1.1300 as USD tracks firmer yields


  • EUR/USD holds lower ground near intraday low, fails to extend Friday’s corrective pullback.
  • Fed vs. ECB battle favor bears, ECB’s Lagarde pushes back reflation fears, Fed’s Bullard hints at earlier rate hike.
  • US jobs report fails to dash bearish bias, Omicron updates are mixed.
  • German Factory Orders, risk catalysts to entertain traders, Friday’s US CPI is the key.

EUR/USD stays pressured around the intraday low of 1.1288, down 0.17% on a day as sellers keep reins ahead of Monday’s European session.

The major currency pair bounced off 1.1266 the previous day to snap a two-day downtrend. However, a firmer US dollar fails to entertain the buyers even as market sentiment turns cautiously optimistic.

The pair’s latest weakness could be linked to comments from European Central Bank (ECB) President Christine Lagarde. The ECB boss terms the latest inflation concerns as a hump and widens the scope for keeping the easy money policies on the board.

Her views contrast with hawkish comments from St. Louis Fed President James Bullard who said, on Friday, “Could look at raising interest rates before completing the taper.”

Friday’s US Nonfarm Payrolls (NFP) couldn’t reject the EUR/USD bears as an improvement in the Unemployment Rate, followed by rallying Fed fund futures, favored odds of a monetary policy tightening at next week's  Federal Open Market Committee (FOMC) meeting.

Other than the ECB versus Fed battle, comparatively weaker covid conditions in the block than the US and the Sino-American tension also underpins the US dollar’s safe-haven demand. Furthermore, fears that China’s struggling real-estate firm Evergande will default as the 30-day grace period ends on Monday also weigh on the EUR/USD prices.

Against this backdrop, S&P 500 Futures rise 0.45% intraday and the US 10-year Treasury yields gain four basis points (bps) to 1.38% by the press time.

Moving on, Germany’s Factory Order data for November, expected -0.5% versus +1.3% MoM prior, will entertain EUR/USD traders. However, major attention will be given to the central bank comments and virus updates ahead of Friday’s US Consumer Price Index (CPI), which will be crucial for next week’s Fed move.

Technical analysis

Multiple levels marked during late November highlights 1.1230 as the key intermediate support ahead of the yearly low near 1.1186. Meanwhile, EUR/USD buyers are less likely to take the risk of entries until witnessing a clear break of the five-week-old descending trend line, around 1.1400 at the latest.

Additional important levels

Overview
Today last price 1.1291
Today Daily Change -0.0018
Today Daily Change % -0.16%
Today daily open 1.1309
 
Trends
Daily SMA20 1.1349
Daily SMA50 1.1501
Daily SMA100 1.1643
Daily SMA200 1.1817
 
Levels
Previous Daily High 1.1334
Previous Daily Low 1.1267
Previous Weekly High 1.1383
Previous Weekly Low 1.1235
Previous Monthly High 1.1616
Previous Monthly Low 1.1186
Daily Fibonacci 38.2% 1.1308
Daily Fibonacci 61.8% 1.1292
Daily Pivot Point S1 1.1273
Daily Pivot Point S2 1.1236
Daily Pivot Point S3 1.1206
Daily Pivot Point R1 1.134
Daily Pivot Point R2 1.137
Daily Pivot Point R3 1.1407

 

 

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