|

EUR/USD faces a challenge around 1.0550 ahead of US NFP data

  • EUR/USD experiences downward pressure ahead of US data.
  • ECB is expected to maintain its current interest rates; weighing on the Euro.
  • Fed's assertion on monetary policy is contributing to the strength in US Bond yields.

EUR/USD moves lower after two-day gains, trading slightly lower around 1.0540 during the Asian session on Friday. However, the pair found support on the upside, a trend that could be linked to the correction in the US Dollar (USD) following a decrease in US Bond yields.

Germany's trade surplus for August decreased to €16.6 billion from €17.7 billion in July, surpassing the market's anticipated figure of €15.0 billion.

European Central Bank (ECB) is expected to maintain its current interest rates at 4.50% in the upcoming meeting later this month. Insights from ECB Governing Council member Mario Centeno on Wednesday suggested that inflation in the Euro area is declining more rapidly than its previous ascent. This observation hints at the possibility that the rate cycle may have reached its conclusion under the current conditions.

The US Dollar Index (DXY) rebounds and trades higher around 106.50 as of now. The Greenback’s correction comes after reaching an 11-month high earlier this week.

US Treasury yields hold steady, maintaining their positions near multi-year highs. Market participants are exercising caution due to the US Federal Reserve's (Fed) hawkish stance on the trajectory of interest rates. The 10-year US Treasury yield remains above 4.70%, close to its highest level since 2007.

US Initial Jobless Claims for the week ending September 29 saw an increase to 207K from the previous reading of 205K. Surprisingly, this surpassed the market expectation of 210K.

US Challenger Job Cuts have significantly decreased from 75.151K to 47.457K in September. Market participants watch for the upcoming release of US Nonfarm Payrolls and Average Hourly Earnings on Friday. These figures will serve as a confirmation of the tight labor market, and upbeat numbers could potentially trigger a rise in the USD and elevate volatility in the bond market.

EUR/USD: additional important levels

Overview
Today last price1.0535
Today Daily Change-0.0011
Today Daily Change %-0.10
Today daily open1.0546
 
Trends
Daily SMA201.0619
Daily SMA501.0779
Daily SMA1001.0845
Daily SMA2001.0826
 
Levels
Previous Daily High1.0552
Previous Daily Low1.05
Previous Weekly High1.0656
Previous Weekly Low1.0488
Previous Monthly High1.0882
Previous Monthly Low1.0488
Daily Fibonacci 38.2%1.0532
Daily Fibonacci 61.8%1.052
Daily Pivot Point S11.0513
Daily Pivot Point S21.0481
Daily Pivot Point S31.0461
Daily Pivot Point R11.0565
Daily Pivot Point R21.0584
Daily Pivot Point R31.0617

Author

Akhtar Faruqui

Akhtar Faruqui is a Forex Analyst based in New Delhi, India. With a keen eye for market trends and a passion for dissecting complex financial dynamics, he is dedicated to delivering accurate and insightful Forex news and analysis.

More from Akhtar Faruqui
Share:

Editor's Picks

AUD/USD consolidates above 0.7000; remains close to monthly top

AUD/USD holds steady above 0.7000 during the Asian session on Friday, trading just below the previous day's monthly low amid diverging forces. A hawkish RBA continues to support the Aussie, while the recent decline in US bond yields keeps the US Dollar depressed near a three-week low. However, oil-driven inflation fears reinforce Fed hike bets, which, along with geopolitical risks, could benefit the safe-haven buck and cap the currency pair.

USD/JPY bounces off one-month low; climbs to 157.00 amid reviving USD demand

USD/JPY rebounds from the 156.00 neighborhood, or a one-month low touched during Friday’s Asian session, with bulls looking to extend momentum beyond 157.00 amid the emergence of some US Dollar buying. Meanwhile, Japan's National CPI rose to a nine-month peak and reaffirmed BoJ rate-hike bets, which could support the Japanese Yen and cap gains for the currency pair.

Gold treads water around $4,000

Gold prices maintain its offered stance in place at the end of the week, hovering around the key $4,000 threshold per troy ounce. The persistent selling bias in the precious metal comes amid decent gains in the US Dollar and an acceptable rebound in US Treasury yields across the curve, all alongside further upside traction in crude oil prices.

Crypto Today: Bitcoin holds the 50-day EMA as Ethereum and XRP face structural resistance

Bitcoin gradually ticks up on Friday, trading above $81,000. The Crypto King has recently defended structural support near $80,000, reinforcing the prevailing bullish outlook. Ethereum similarly edges higher above $2,400, while Ripple trades above $1.32 after testing support around $1.30.

The French bond panic is overdone. Here's what the market is misreading 

France's 10-year government bond yield has climbed above 5%, reigniting fears of a sovereign debt crisis in the Eurozone. With public debt exceeding €3.5 trillion, persistent budget deficits and a fragmented political landscape, investors are increasingly questioning the French government's ability to stabilize its finances.

What November 3 means for the Fed's rate path and the US Dollar

The USD faces a decisive period ahead of the November 3 midterm elections. While markets anticipate another interest rate increase from the Fed in December, the battle for control of Congress could reshape fiscal policy expectations and, indirectly, the path of US monetary policy in 2027.