EUR/USD fails ahead of 1.23 handle, eases from highs

Haresh Menghani FXStreet

• Surging US bond yields lend eases USD bearish pressure.
• Traders opted to book profits near 3-year tops.
• Investors turn cautious ahead of next week’s ECB meeting.

The EUR/USD pair stalled its steady up-move just ahead of the 1.2300 handle and has now retreated around 30-40 pips from session tops.

Currently trading around the 1.2260 region, the latest leg of retracement lacked any fundamental trigger and hence, could be solely attributed to a modest greenback rebound.

Despite looming fears of a possible US government shutdown, the ongoing upsurge in the US Treasury bond yields and technically oversold picture helped the key US Dollar Index to once again find some support near the 90.00 handle.

Against the backdrop of the recent jawboning by several ECB officials, some long-unwinding pressure also seems to have collaborated to the pair's modest retracement from closer to 3-year tops.

Moreover, traders might be reluctant to place any aggressive bets and preferred to wait for the next fundamental trigger - the ECB monetary policy meeting, due next week.

Nevertheless, the pair still seems set to end the week on a high note and post fifth consecutive week of gains as traders now look forward to the release of Prelim UoM Consumer Sentiment from the US and Fedspeaks for some short-term opportunities.

Technical levels to watch

A follow-through retracement below mid-1.2200s could get extended towards 1.2225 intermediate support en-route the 1.2200 handle. On the upside, the 1.2285-95 region now seems to have emerged as an immediate hurdle, above which the pair seems to dart towards multi-year highs resistance near the 1.2320-25 region.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

EUR/USD meets initial support around 1.1800

EUR/USD remains on the back foot, although it has managed to reverse the initial strong pullback toward the 1.1800 region and regain some balance, hovering around the 1.1850 zone as the NA session draws to a close on Tuesday. Moving forward, market participants will now shift their attention to the release of the FOMC Minutes and US hard data on Wednesday.

GBP/USD bounces off lows, retargets 1.3550

After bottoming out just below the 1.3500 yardstick, GBP/USD now gathers some fresh bids and advances to the 1.3530-1.3540 band in the latter part of Tuesday’s session. Cable’s recovery comes as the Greenback surrenders part of its advance, although it keeps the bullish bias well in place for the day.

Gold remains offered below $5,000

Gold stays on the defensive on Tuesday, receding to the sub-$5,000 region per troy ounce on the back of the persistent move higher in the Greenback. The precious metal’s decline is also underpinned by the modest uptick in US Treasury yields across the spectrum.

RBNZ set to pause interest-rate easing cycle as new Governor Breman faces firm inflation

The Reserve Bank of New Zealand remains on track to maintain the Official Cash Rate at 2.25% after concluding its first monetary policy meeting of this year on Wednesday.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.

Ripple slides to $1.45 as downside risks surge

Ripple edges lower at the time of writing on Tuesday, from the daily open of $1.48, as headwinds persist across the crypto market. A short-term support is emerging at $1.45, but a buildup of bearish positions could further weaken the derivatives market and prolong the correction.