|

EUR/USD defends bids above 1.0250 amid cautious mood

  • EUR/USD is finding buyers amid sluggish market conditions.
  • Investors turn cautious amid US-Sino tensions, ahead of Fed minutes.
  • The European energy crisis deepens as Germany’s Rhine river dry up.

EUR/USD is trading better bid above 1.0250, as buyers seemingly find support from a dismal market mood and sluggish US Treasury yields.

The US rates pause their upswing seen on Friday, as investors seek refuge in the government bonds and the dollar amid looming US-China risks after the former sent a delegation to Taiwan over the weekend even after the contentious visit by House Speaker Nancy Pelosi to the disputed island, which infuriated Beijing.

Further, rising odds of a 50 bps Fed rate hike in September, after easing US inflation pressures, weigh negatively on the yields, with all eyes on Wednesday’s FOMC minutes for fresh insights on the policy path of the world’s most powerful central bank.

Meanwhile, the US dollar is holding steady in early Asian trades, divided between the retreat in the yields and a tepid appetite for riskier assets. The US dollar index is trading flat at 105.61, having rebounded firmly to 105.88 last Friday. Stronger US Michigan Consumer Sentiment data and easing US inflation outlook triggered a sharp rally on the buck, despite solid performance on Wall Street.

On the EUR side of the equation, the gains in the shared currency will likely remain limited amid the deepening European energy crisis. Already, a cut in the Russian gas exports is severely impacting the old continent, with Germany being the worst hit.  German economy could tip into a recession as sinking Rhine waters make shipping along the river harder.

Further up the river in Kaub, a noted bottleneck for shipping where the Rhine runs narrow and shallow, the reference level was forecast to go below 40 centimeters by the end of the week. It's worth noting that coal counts among key cargo moved on the waterway.

On the economic data front, Monday’s calendar is relatively data-scare on both sides of the Atlantic, with regard to the top-tier events. Therefore, the broader market sentiment and the dollar price action will continue to influence the main currency pair.

EUR/USD: Technical levels to watch

EUR/USD

Overview
Today last price1.0261
Today Daily Change0.0002
Today Daily Change %0.02
Today daily open1.026
 
Trends
Daily SMA201.0212
Daily SMA501.0329
Daily SMA1001.0525
Daily SMA2001.0896
 
Levels
Previous Daily High1.0328
Previous Daily Low1.0238
Previous Weekly High1.0369
Previous Weekly Low1.0159
Previous Monthly High1.0486
Previous Monthly Low0.9952
Daily Fibonacci 38.2%1.0272
Daily Fibonacci 61.8%1.0293
Daily Pivot Point S11.0223
Daily Pivot Point S21.0186
Daily Pivot Point S31.0134
Daily Pivot Point R11.0313
Daily Pivot Point R21.0365
Daily Pivot Point R31.0402

Author

Dhwani Mehta

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

More from Dhwani Mehta
Share:

Editor's Picks

GBP/USD clings to 1.3500 amid marginal losses

GBP/USD alternates gains with losses around the 1.3500 neighbourhood on Tuesday. Indeed, Cable struggles to further extend its incipient recovery in a context of continuous instability in the Middle East and modest gains in the Greenback.

EUR/USD alternates gains with losses near 1.1540

EUR/USD navigates a tight range near 1.1550 in the latter part of Tuesday’s NA session. The US Dollar’s vacillating price action accompanies the pair while market participants gear up for the crucial US inflation data due on Wednesday.

Gold loses the grip below $4,400

Gold retreats from its earlier tops and briefly revisited the $4,350 region per troy ounce on Tuesday. The yellow metal’s modest retracement follows lacklustre gains in the US Dollar and declining US Treasury yields across the curve, all amid steady uncertainty from the geopolitical landscape.

Shiba Inu Price Forecast: SHIB extends sell-off despite surging futures Open Interest
Shiba Inu (SHIB) maintains a bearish outlook on Tuesday, as it edges lower at $0.00000450. This marks the seventh day the meme coin has sustained a sell-off, weighed down by a weak technical structure. Shiba Inu derivatives continue to gain momentum, with perpetual futures Open Interest (OI) rising to 11.08 trillion SHIB on Tuesday, from 10.46 trillion the day before.
The inflation narrative is still way more important than the employment story
Core bonds sold off yesterday with the belly of the curve slightly underperforming in the US while European curves showed more of a bear flattening. Daily changes on the US curve varied between +4.7 bps (2-yr) and +6.4 bps (7-yr).
9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?
The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.