EUR/USD: Corrective pullback eyes 1.1485 amid softer USD

EUR/USD keeps Friday’s rebound from yearly low, retreats of late.
Mixed chatters over Fed rate hike join hopes over US stimulus, phase 1 deal to favor buyers.
ECB policymakers stay divided over inflation fears.
DXY tracks US Treasury yields lower, equity traders seem divided.

Anil Panchal FXStreet

EUR/USD grinds higher around 1.1560, up 0.10% intraday heading into Monday’s European session. The major currency pair dropped to a fresh 16-month low on Friday before bouncing off 1.1432. In doing so, the quote formed a Doji candlestick formation, underpinning the latest rebound amid mildly offered US Treasury yields and the US dollar.

The mixed concerns over the US stimulus and inflation, as well as the Fed rate hike following Friday’s surprisingly downbeat Michigan Consumer Sentiment data that slumped to a 10-year low, seem to underpin the cautiously optimistic market mood. On the same line were the latest comments from US Treasury Secretary Janet Yellen and Federal Reserve Bank of Minneapolis President Neel Kashkari, coupled with the hopes of the US-China phase 1 deal.

Even so, the Fed rate hike concerns remain elevated, ignoring the policymakers’ ‘transitory’ outlook for inflation, as inflation expectations and details of the consumer confidence data highlight the reflation fears.

It’s worth noting that the recently mixed comments from the European Central Bank’s (ECB) policymakers also underpin the EUR/USD rebound. On Friday, Governing Council member Gediminas Simkus said inflation will fall below target in 2023, adding that it is not in line with the forward guidance conditions. His fellow Official at the ECB Olli Rehn said on Friday that the relief on supply bottleneck may not arrive until toward the end of 2022, as reported by Reuters.

Amid these plays, the US 10-year Treasury yields drop 2.4 basis points (bps) to 1.56% whereas the S&P 500 Futures struggle for a clear direction amid a sluggish Asian session.

Looking forward, a light calendar and the upcoming US-China talks may keep EUR/USD moves confined ahead of Tuesday’s US Retail Sales, expected to keep 0.7% MoM growth.

Technical analysis

Friday’s Doji joins nearly oversold RSI conditions and multiple supports to the downside to keep EUR/USD buyers hopeful to challenge the support-turned-resistance line from October, near 1.1485. On the upside, the further downside will aim for the previous day’s low of 1.1432, a break of which will direct EUR/USD towards June 2020 top, surrounding 1.1422.

Additional important levels

Overview
Today last price	1.1456
Today Daily Change	0.0010
Today Daily Change %	0.09%
Today daily open	1.1446

Trends
Daily SMA20	1.1584
Daily SMA50	1.1646
Daily SMA100	1.1726
Daily SMA200	1.1878

Levels
Previous Daily High	1.1462
Previous Daily Low	1.1433
Previous Weekly High	1.1609
Previous Weekly Low	1.1433
Previous Monthly High	1.1692
Previous Monthly Low	1.1524
Daily Fibonacci 38.2%	1.1444
Daily Fibonacci 61.8%	1.1451
Daily Pivot Point S1	1.1432
Daily Pivot Point S2	1.1418
Daily Pivot Point S3	1.1403
Daily Pivot Point R1	1.1461
Daily Pivot Point R2	1.1476
Daily Pivot Point R3	1.1491

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

AUD/USD bounces back toward 0.6950 on fresh USD supply

AUD/USD bounces back toward 0.6950 in the Asian session on Friday. The US Dollar retreats from 17-month highs as traders take profits off the table ahead of the all-important US Nonfarm Payrolls report. Meanwhile, the Australian Dollar draws support from reviving expectations of a November interest rate hike amid elevated global yields and inflation risks.

USD/JPY struggles near 158.00 as USD retreats ahead of NFP

USD/JPY is struggling for fresh impetus near 158.00, moving away from the top end of its weekly range in the Asian session on Friday, after hotter-than-expected Tokyo CPI and amid a broad US Dollar retreat. Traders reposition themselves ahead of US Nonfarm Payrolls.

Gold fades the earlier optimism; back below $4,200

Gold could not sustain the post-NFP bull run past the $4,200 mark per troy ounce, receding toward the $4,180 region at the end of the week. The precious metal’s inconclusive price action comes amid fresh selling pressure hurting the US Dollar as investors assess the latest NFP data.

Week ahead: Fed minutes in the spotlight amid bond market rout

The first full week of October and the final quarter of the year get underway with little fanfare in terms of the economic agenda. But far from being short on excitement, the coming week will test market nerves, as government bond yields continue to soar on growing worries that the energy crisis will only get worse, fuelling inflation.

CFTC Report: Speculators turn more defensive as Oil exposure falls

The week in one sentence: During the week leading up to September 29, long positions in crude oil were significantly reduced, while short positions in the Canadian Dollar went up. In addition, the positioning of the Australian Dollar and the Japanese Yen declined, while Coffee buying stood out against a more general background of defensiveness.

The Euro is near a one-year low: Inflation could trigger its rebound, not its fall

EUR/USD has fallen to its lowest level since May 2025. The pair hit 1.1312 on Wednesday and trades well below the January peak of 1.2082. The decline reflects a powerful combination of US Dollar strength, geopolitical uncertainty and renewed concerns about Europe's exposure to higher energy prices.