- EUR/USD fades part of the earlier advance to the 1.0350 region.
- Germany flash Manufacturing PMI seen rebounding a tad in November.
- Markets’ attention will be on the release of the FOMC Minutes later in the day.
The European currency extends the recent optimism and lifts EUR/USD to the 1.0350 zone on Wednesday, where it appears to be encountering some initial resistance.
EUR/USD focuses on the Fed, data
EUR/USD advances for the second session in a row so far against the backdrop of renewed selling pressure in the Greenback, which also appears weighed down by the lack of traction in US yields.
In the German debt market, the key 10-year bund yield remains flat-lined just below the 2.0% yardstick.
There is no meaningful reaction in the pair to the mixed results from the advanced PMIs in both Germany and the broader Euroland for the month of November. Indeed, the Manufacturing PMI came out at 46.7 (from 45.1) in Germany and 47.3 (from 46.4) in the euro bloc, while the Services gauge is seen at 46.4 (from 46.5) and 48.6 (from 48.6), respectively.
Later on the US docket, all the attention is expected to gyrate around the publication of the FOMC Minutes, seconded by Initial Claims, Durable Goods Orders, flash PMIs, New Home Sales and the final Consumer Sentiment.
What to look for around EUR
EUR/USD trades on a firm note and reaches the mid-1.0300s, as cautiousness keeps the US Dollar under the microscope ahead of the release of the FOMC Minues.
In the meantime, the European currency is expected to closely follow Dollar dynamics, geopolitical concerns and the Fed-ECB divergence. In addition, markets repricing of a potential pivot in the Fed’s policy remains the exclusive driver of the pair’s price action for the time being.
Back to the euro area, the increasing speculation of a potential recession in the region - which looks propped up by dwindling sentiment gauges as well as an incipient slowdown in some fundamentals – emerges as an important domestic headwind facing the Euro on the short-term horizon.
Key events in the euro area this week: EMU, Germany Advanced PMIs (Wednesday) – Germany IFO Business Climate, ECB Accounts (Thursday) – Germany Final Q3 GDP Growth Rate, GfK Consumer Confidence (Friday).
Eminent issues on the back boiler: Continuation of the ECB hiking cycle vs. increasing recession risks. Impact of the war in Ukraine and the persistent energy crunch on the region’s growth prospects and inflation outlook. Risks of inflation becoming entrenched.
EUR/USD levels to watch
So far, the pair is gaining 0.09% at 1.0312 and faces the next up barrier at 1.0395 (200-day Simple Moving Average (SMA)) ahead of 1.0481 (monthly high November 15) and finally 1.0500 (round level). On the flip side, a breach of 1.0222 (weekly low November 21) would target 1.0023 (100-day SMA) en route to 0.9935 (low November 10).
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.
Follow us on Telegram
Stay updated of all the news
EUR/USD rises toward 1.0800 as USD weakens
EUR/USD has gained traction and advanced toward 1.0800 in the early American session on Monday. The positive opening witnessed in Wall Street makes it difficult for the US Dollar to find demand and helps the pair continue to push higher.
GBP/USD closes in on 1.2300 as mood improves
GBP/USD has preserved its bullish momentum and advanced to the 1.2300 area in the second half of the day on Monday. The risk positive market atmosphere makes it difficult for the US Dollar to stay resilient against its rivals and fuels the pair's daily rally. Eyes on BOE Governor Bailey's speech.
Gold: XAU/USD pared losses and consolidates around $1,950.00 Premium
Spot gold trades in the $1,950 price zone, sharply down on Monday as investors move away from safe-haven assets. The sentiment is positive at the start of the week amid easing concerns related to a global banking crisis.
Four reasons why SUSHI holders will have a bullish week despite SEC's move
SushiSwap price undid the early March gains in the last week after the SEC subpoenaed the platform’s head chef Jared Grey. As a result of this announcement, the token collapsed by roughly 18%.
Alibaba (BABA) edges higher after Jack Ma returns to China for AI talk
BABA shareholders begin the week with a glimmer of hope after founder Jack Ma was seen visiting China after spending more than one year abroad. The report originally led to Alibaba's shares in Hong Kong rising 4% before subsiding.