|

EUR/USD eyes a confident break above 1.0860 for a solid recovery ahead of US Retail Sales

  • EUR/USD is needed a decisive break above 1.0860 for a confident recovery as the market mood is turning cheerful.
  • US President Joe Biden is set to meet Republican leaders for further negotiations on raising the borrowing cap on Tuesday.
  • The pace of Eurozone GDP is seen unchanged on a quarterly and an annual basis at 0.1% and 1.3% respectively.

The EUR/USD pair attempted a rebound move from 1.0850 but has struggled in extending recovery above 1.0863 in the Asian session. The major currency pair is making efforts for extending recovery as the US Dollar Index (DXY) has shown signs of exhaustion in the upside momentum.

Improving market sentiment has fueled some strength in risk-perceived assets. S&P500 futures have recovered the majority of losses reported in early Asia as investors are ignoring risks associated with United  States debt-ceiling issues and are capitalizing on rising expectations that the Federal Reserve (Fed) will pause its policy-tightening spell.

The US Dollar Index (DXY) has shown some volatility in the Asian session after refreshing its five-week high at 102.75 as US President Joe Biden is set to meet Republican leaders for further negotiations on raising the borrowing cap of the US Treasury on Tuesday. However, no practical outcome of Tuesday’s meeting would deeper fears of payment default significantly.

Meanwhile, volatility increment in the USD Index has also impacted US yields. The 10-year US Treasury yields have dropped below 3.46%.

Going forward, the USD Index would show some action amid the release of the US Retail Sales data. Monthly Retail Sales data is seen expanding by 0.7% vs. a contraction of 0.6%. A recovery in the retail demand by households might weak expectations for a rate-hike pause by the Fed.

On the Eurozone front, investors are awaiting the release of the preliminary Gross Domestic Product (GDP) data (Q1), which is scheduled for Tuesday. The pace in GDP growth is seen unchanged on a quarterly and an annual basis at 0.1% and 1.3% respectively. It seems that Eurozone would manage to escape recession ahead.

About interest rate guidance, European Central Bank (ECB) policymaker Peter Kazimir said, “ECB may need to raise interest rates longer than previously thought to help tame inflationary pressures.”

EUR/USD

Overview
Today last price1.086
Today Daily Change0.0011
Today Daily Change %0.10
Today daily open1.0849
 
Trends
Daily SMA201.0985
Daily SMA501.0871
Daily SMA1001.0799
Daily SMA2001.0453
 
Levels
Previous Daily High1.0936
Previous Daily Low1.0848
Previous Weekly High1.1054
Previous Weekly Low1.0848
Previous Monthly High1.1095
Previous Monthly Low1.0788
Daily Fibonacci 38.2%1.0881
Daily Fibonacci 61.8%1.0902
Daily Pivot Point S11.0819
Daily Pivot Point S21.079
Daily Pivot Point S31.0732
Daily Pivot Point R11.0907
Daily Pivot Point R21.0965
Daily Pivot Point R31.0994

Author

Sagar Dua

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

More from Sagar Dua
Share:

Editor's Picks

AUD/USD holds firm near 0.7000 after Chinese inflation data

AUD/USD stays firm near 0.7000 in Wednesday’s Asian session, little moved by China's mixed inflation data. CPI rose less than expected in September, while PPI inflation picked up. The pair remains underpinned by a broadly subdued US Dollar, despite the Middle East escalation, as focus will be on the US consumer inflation figures for fresh tradiing impetus.

USD/JPY consolidates below 158.50; looks to US CPI for fresh impetus

USD/JPY steadies below mid-158.00s during the Asian session on Wednesday, with looming intervention risks supporting the Japanese Yen and capping the upside amid a softer US Dollar. However, geopolitical uncertainties act as a tailwind for the safe-haven USD and the currency pair. Traders also seem hesitant ahead of the release of the latest US consumer inflation figures.

Gold holds steady above $4,150 as traders await US CPI report

Gold is seen oscillating in a narrow band above $4,150 during the Asian session on Wednesday, awaiting US consumer inflation figures for more cues about the Fed's policy path. Meanwhile, expectations of at least one more Fed rate hike this year cap the non-yielding bullion. However, a softer US Dollar, weighed down by the recent pullback in US bond yields, helps limit the downside for the commodity.

Strategy bitcoin buying model faces scrutiny as STRC costs climb
Strategy’s (MSTR) STRC financing strategy increased its Bitcoin (BTC) holdings in H1, but made its capital structure more expensive, prompting an examination of its effectiveness, according to a Tuesday report by K33. STRC recovered close to its $100 par value, closing at $99.90 after an extended period of heavy buybacks.
What happens after a US Treasury market crash
The global bond market is under severe pressure as US Treasury yields reach multi-decade highs, driven by persistent inflation risk, heavy government and corporate debt issuance, and expanding term premiums. Higher yields raise borrowing costs and tighten financial conditions, but a severe bond selloff can ultimately shift investor focus from inflation to growth and financial stability.
Has Bitcoin really escaped the macro forces it was built to fight?
Over 17 years ago, Satoshi Nakamoto designed Bitcoin (BTC) on the back of a global financial crisis as an alternative to the global monetary system outside the control of central banks, governments and traditional intermediaries. This raises a key question: has Bitcoin really become independent of the macroeconomic forces it was built to challenge?