• Resurgent USD demand triggers the initial leg of the intraday slide.
• Italian worries exert additional pressure on the shared currency.
• The latest FOMC policy update eyed for some fresh impetus.
The EUR/USD pair faded a minor uptick to an intraday high level of 1.1445 and was now seen extending overnight retracement slide from over two-week tops.
After consolidating through the Asian/early European session, the pair met with some fresh supply and the initial leg of downtick was triggered by a strong follow-through US Dollar buying interest.
With investors looking past the US midterm election results, the greenback pulled away from 2-1/2 week lows, set on Wednesday, and was further supported by a mildly positive tone around the US Treasury bond yields.
Meanwhile, concerns over Italy's debt situation amid a dispute with the European officials over its budget spending plans exerted some additional downward pressure on the shared currency and further collaborated to the pair's slide back closer to the 1.1400 round figure mark.
As Yohay Elam, FXStreet's own Analyst writes: “Italy is preparing its response to the European Commission's rejection of its budget. An answer is due by November 13th. In the meantime, Italy's coalition parties, the 5-Star Movement and the League are embroiled in a clash over migration policies. Political analysts see a potential for a collapse of the government and early elections in the euro zone's third-largest economy.”
The downfall, however, remained cushioned, at least for the time being, with the pair quickly rebounding from the 1.1400 handle as market participants seemed reluctant to place aggressive bets ahead of the upcoming FOMC monetary decision, scheduled to be announced during the US trading session.
Technical levels to watch
Yohay explains: “1.1395 is the low point seen on Wednesday, and it is also very close to the SMA 50. 1.1355 was a swing low early in the week. 1.1330 was a trough in late October. Finally, 1.1300 is a critical double bottom.”
“1.1455 was the peak in early November. 1.1500 is not only a very round number but also the high point on Wednesday and where the 200 SMA is at the moment,” he added further.
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.
Recommended content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.