• EUR/USD pares the biggest daily gains since March as risk-aversion returns to the table.
  • Yields, DXY reverse pullback from multi-year high amid hawkish central bankers, looming recession.
  • Europe versus Russia tension is likely to exert downside pressure on prices.
  • Germany’s HICP may not impress pair buyers unless US GDP disappoints.

EUR/USD sellers are up and roaring as sour sentiment joins firmer yields to renew the downside during early Thursday, after a day full of surprises and upbeat performance. That said, the major currency pair takes offers to renew the intraday low near 0.9670 while reversing the previous day’s bounce off the 20-year low, also consolidating the most significant daily jump in six months.

Wednesday’s risk-on mood and China’s efforts to propel the domestic markets to overcome slowdown fears seem to favor the recent rebound in the US Treasury yields and the US dollar.

On the same line could be the People’s Bank of China’s (PBOC) first increase in the onshore yuan fix in nine days and plans to issue 2.5 trillion yuan in government bonds in Q4.

Additionally, the markets’ doubts about the Bank of England’s (BOE) capacity to restore the British economic performance while keeping the recently criticized fiscal plan weigh on the EUR/USD prices. Further, the hawkish commentary from the global central bankers, including those from Europe and the US, joins the looming energy crisis in Europe and Russia’s hesitance to respect the Western pressure to exert additional downside pressure on the major currency pair.

It should be noted that the hawkish comments from the European Central Bank (ECB) policymakers and the Bank of England’s (BOE) bond-buying helped the EUR/USD to rebound the previous day.

Also read: EUR/USD struggles to extend rebound beyond 0.9700, German Inflation, US GDP eyed

Additoinally, World Bank President David Malpass anticipates risk of stagflation and likely recession in Europe due to the Russia-Ukraine tussle, offer extra weakness to the EUR/USD pair.

Against this backdrop, the US 10-year Treasury bond yields pare the biggest daily loss in six months, allowing the US Dollar Index (DXY) to jump back towards the 20-year high marked the previous day. It’s worth noting that the S&P 500 Futures print mild losses and fades bounce off a 21-month low of late.

Looking forward, Germany’s headline inflation data, namely the Harmonized Index of Consumer Prices (HICP), could direct immediate EUR/USD moves amid upbeat expectations from the release, 10.0% YoY versus 8.8% prior. Following that, readings of the US Q2 Gross Domestic Product (GDP), expected to confirm -0.6% annualized figure, will be essential to watch clear directions.

To sum up, EUR/USD weakness is likely to continue even if the German/US data challenge the pair’s downtrend. The reason could be the risk-off mood and the US dollar’s safe-haven status.

Technical analysis

The bullish MACD signals and the firmer RSI (14) keep the EUR/USD buyers hopeful. That said, the 21-SMA, currently around 0.9640 offers immediate support ahead of the resistance-turned-support line from September 13, near the 0.9600 threshold.

Alternatively, a convergence of the downward sloping trend line from August 23 and the 50-SMA, around 0.9800 at the latest, appears a tough nut to crack for the pair buyers.

Additional important levels

Overview
Today last price 0.9681
Today Daily Change -0.0054
Today Daily Change % -0.55%
Today daily open 0.9735
 
Trends
Daily SMA20 0.9908
Daily SMA50 1.0048
Daily SMA100 1.0257
Daily SMA200 1.067
 
Levels
Previous Daily High 0.9751
Previous Daily Low 0.9536
Previous Weekly High 1.0051
Previous Weekly Low 0.9668
Previous Monthly High 1.0369
Previous Monthly Low 0.9901
Daily Fibonacci 38.2% 0.9669
Daily Fibonacci 61.8% 0.9618
Daily Pivot Point S1 0.9596
Daily Pivot Point S2 0.9458
Daily Pivot Point S3 0.9381
Daily Pivot Point R1 0.9812
Daily Pivot Point R2 0.9889
Daily Pivot Point R3 1.0027

 

 

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.

Feed news Join Telegram

Recommended content


Recommended content

Editors’ Picks

AUD/USD eyes are on critical daily dynamic support

AUD/USD eyes are on critical daily dynamic support

AUD/USD bears eye a 50% mean reversion in the lower quarter of the 0.6700s. A break of the supporting trendline and subsequent test of  0.6640/50 could be a significant bearish development.

AUDUSD News

EUR/USD aims for 1.0550 despite upbeat US NFP data, Eurozone Retail Sales eyed

EUR/USD aims for 1.0550 despite upbeat US NFP data, Eurozone Retail Sales eyed

The EUR/USD pair is hovering around a fresh five-month high at 1.0545 in the early Asian session. The major currency pair is expected to extend its rally to near 1.0550 ahead amid an upbeat market mood.

EUR/USD News

Gold struggles around $1,800 ahead of ISM Services PMI data

Gold struggles around $1,800 ahead of ISM Services PMI data

Gold price is facing immense pressure in conquering the round-level resistance of $1,800.00 in the early Tokyo session. The precious metal is highly expected to display more gains ahead and may extend towards a fresh three-month high at $1,824.63.

Gold News

AVAX: Traders bet should be on Avalanche bulls triggering a 15% rally

AVAX: Traders bet should be on Avalanche bulls triggering a 15% rally

AVAX price has breached an inverse head-and-shoulders setup, hinting at a 13% upswing. AVAX price has broken out of a critical hurdle and pattern, signaling the start of a quick run-up. AVAX price action created an inverse head-and-shoulder setup.

Read more

The Yen, Payrolls, and the Oil price

The Yen, Payrolls, and the Oil price

US stocks wrapped their second straight week of gains, even if stocks slipped on Friday on the back of better-than-expected US Payrolls data.We have been amazed by the resilience in risky assets of late. This year has seen some incredible macro themes.

Read more

Forex MAJORS

Cryptocurrencies

Signatures