EUR/USD eyes further losses below 1.1300 on USD rebound, US data eyed

EUR/USD refreshes intraday low while snapping two-day uptrend.
Cautious mood recalls USD buyers ahead of the key data, ignoring downbeat yields.
US inflation expectations recover, ECB policymakers stay divided on next move.
Final reading of the US Q3 GDP, CB Consumer Confidence for December becomes the key data, Omicron, BBB also in focus.

Anil Panchal FXStreet

EUR/USD takes offers to renew intraday low near 1.1270 heading into Wednesday’s European session.

The major currency pair rose during the last two days amid optimism concerning the US stimulus and Omicron. However, fears of worsening virus cases, geopolitical challenges and fiscal stimulus updates weigh on the market sentiment ahead of this week’s key US data.

US President Joe Biden’s expectations of getting the “Build Back Better (BBB)” plan done as well as vaccine/treatment optimism faded after European economies announced fresh virus-linked activity restrictions. Adding to the bearish bias were recently recovering inflation expectations, as measured by the 10-year breakeven inflation rate per the St. Louis Federal Reserve (FRED) data.

Additionally, news that the US appoints a new Tibet Coordinator amid tensions with China joins the tension with Russia to weigh on the risk appetite and underpin the US dollar’s safe-haven demand.

On the contrary, indecision amid the European Central Bank (ECB) policymakers over the inflation stance, versus the Fed’s clear view, weigh on the EUR/USD prices. Recently, ECB policymaker and Slovak central bank Governor Peter Kazimir said, “There is a risk that elevated inflation will stay for a longer time.”

Against this backdrop, the US 10-year Treasury yields dropped two basis points (bps) to 1.465% whereas the S&P 500 Futures decline 0.13% intraday even as the Wall Street benchmarks snapped a three-day downtrend. Further, the US Dollar Index (DXY) snaps a two-day downtrend to gain, up 0.12% intraday around 96.55 at the latest.

It’s worth noting that a lack of market moves during the year-end holiday season may restrict short-term EUR/USD prices even as the bears keep the controls. That said, Omicron updates and US stimulus chatters could entertain traders ahead of the US final Q3 GDP and the CB Consumer Confidence for December.

Read: Conference Board Consumer Confidence December Preview: Where do Americans turn for optimism?

Technical analysis

Repeated failures to cross the 21-DMA, around 1.1290 by the press time, directs EUR/USD sellers towards an ascending support line from November 24, at 1.1230.

Additional important levels

Overview
Today last price	1.1273
Today Daily Change	-0.0010
Today Daily Change %	-0.09%
Today daily open	1.1283

Trends
Daily SMA20	1.1287
Daily SMA50	1.1427
Daily SMA100	1.1579
Daily SMA200	1.1775

Levels
Previous Daily High	1.1302
Previous Daily Low	1.1261
Previous Weekly High	1.136
Previous Weekly Low	1.1222
Previous Monthly High	1.1616
Previous Monthly Low	1.1186
Daily Fibonacci 38.2%	1.1287
Daily Fibonacci 61.8%	1.1277
Daily Pivot Point S1	1.1262
Daily Pivot Point S2	1.124
Daily Pivot Point S3	1.122
Daily Pivot Point R1	1.1303
Daily Pivot Point R2	1.1324
Daily Pivot Point R3	1.1345

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.

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