- EUR/USD snaps three-day uptrend, pressured near intraday low of late.
- US dollar tracks firmer Treasury yields amid indecision over Fed’s tapering, covid woes.
- German IFO number, US Durable Goods Orders will decorate the calendar but Powell’s Jackson Hole Symposium speech is the key.
EUR/USD holds lower ground near intraday low after snapping a three-day run-up during early Wednesday. That said, the currency-major pair drops 0.15% on a day surrounding 1.1730 heading into the European session.
The covid woes and fading vaccine optimism, as well as cautious mood ahead of the Jackson Hole Symposium event, underpin the US dollar’s safe-haven demand.
With this, the US Dollar Index (DXY) rises 0.17% daily to take a U-turn from the weekly low, not to forget marking the first positive day in the last four. In doing so, the greenback gauge follows the US 10-year Treasury yields, as the bond coupon stays firmer around 1.30% after rising the most in two weeks the previous day.
French covid hospitalizations jumped to a two-month high while Germany dropped incidence levels as key COVID-19 yardstick as the virus spreads inside the bloc. Additionally, Italy reports a jump in the daily virus-led deaths to 60 on Tuesday. It’s worth noting that the US Health Official Dr. Anthony Fauci’s expectations to get the COVID-19 under control during early 2022, provided faster jabbing, even the world’s largest economy battles multi-day high death tolls and rising infections at home.
Read: Investors suspect coronavirus apex in US and China
On Tuesday, softer US Richmond Fed Manufacturing Index data for August, 9 versus 25 expected, joined the first rise in the New Home Sales in four months and upbeat German GDP to weigh on the EUR/USD prices the previous day, amid risk-on mood. However, the mixed data currently looks to the US Durable Goods Orders for July, forecast -0.3% versus +0.9% prior, for further firming up odds favoring the need for easy money policies.
Read: Durable Goods Orders Preview: The trigger for a greenback comeback?
For an immediate direction, the German IFO sentiment figure for August could also help the EUR/USD traders after the previous day’s firmer GDP data from the bloc’s largest economy back the bulls. Above all, Fed Chair Jerome Powell’s speech the Jackson Hole becomes the key event of the week.
Technical analysis
Despite the recent pullback, EUR/USD keeps Tuesday’s break of the falling wedge bullish formation’s resistance line amid bullish MACD, which in turn keeps the buyers hopeful of crossing 20-DMA resistance near 1.1775 unless the quote drops back below 1.1715.
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. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stays below 1.0900 as Q1 comes to an end
EUR/USD has lost its traction and declined below 1.0900 in the American session on Friday. Quarter-end flows seem to be allowing the US Dollar find some demand but the risk-positive market environment seems to be limiting the pair's downside ahead of the weekend.
GBP/USD trades below 1.2400, looks to post weekly gains
GBP/USD has edged lower after having tested 1.2400 earlier in the day but remains on track to end the third straight week in positive territory. The upbeat mood remains intact after soft PCE inflation data from the US, making it difficult for the US Dollar to continue to gather strength.
Gold tries to stabilize near $1,980 following earlier spike
Gold price has returned to the $1,980 area following a spike above $1,987 with the initial reaction to lower-than-expected PCE inflation figures from the US. Meanwhile, the benchmark 10-year US Treasury bond yield stays in the red near 3.5%, providing support to XAU/USD.
Will Dogecoin price pull an XRP and rally 60% next week?
Dogecoin price has been in a tight range bound movement since November 22. The recent recovery above the range low looks promising and hints at an explosive move for next week.
Week ahead – Nonfarm payrolls to set the tone for US dollar
With the banking turmoil receding, market participants will turn their attention back to economic releases. The spotlight will fall on the US employment report.