EUR/USD - Focus on ISM PMI, US-German yield spread contradicts rally

EUR/USD regained the 1.19 handle.
PMI day ahead.
US-German yield spread could spike in USD positive manner.

Omkar Godbole FXStreet Contributor

The EUR/USD rose above 1.19 handle and in the process left another higher low on the daily chart as the Eurozone employment and inflation numbers showed the 17-nation currency bloc is moving in the right direction.

Focus on PMIs

Kathy Lien from BK Asset Management writes, " Revisions to November PMIs are due for release on Friday. It is difficult to predict the direction of any revisions but if changes are made, they could have a near-term impact on the euro."

In the US session, all eyes would be on the US Nov. ISM manufacturing figure. It is expected to show the pace of expansion in the activity remained largely unchanged. The bid tone around the USD could strengthen if the details of the ISM index show labor market remains strong. Also, the tax bill uncertainty could cap the downside in the EUR/USD.

US-German yield differential contradicts uptick in EUR/USD

The 10-year US-German yield differential rose to a one-month high of 203.9 basis points yesterday. The widening of the yield spread in the USD positive manner puts a question market on the sustainability of the EUR/USD rally.
The spread could witness an upside break (move above 204.2 basis points) if the ISM manufacturing PMI betters estimates.

EUR/USD Technical Levels

FXStreet Chief Analyst Valeria Bednarik writes-

"The price is holding just a handful of pips above a bearish 20 SMA, while technical indicators turned south within positive territory, now nearing their mid-lines. The pair is midway of its weekly range, clearly showing the absence of a defined trend. Whereas above 1.1960 or below 1.1790 the outlook will be more defined, seems the market will wait for December Fed and ECB's monetary policy announcements before choosing a side."

Support levels: 1.1860 1.1820 1.1785

Resistance levels: 1.1930 1.1960 1.2000

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

AUD/USD rises to 0.6950 as USD slips on Fed's Warsh

AUD/USD regains traction and extends the bounce toward 0.6950 in the Asian session on Friday. Fed Chair Warsh's comments reinforce the selling pressure on the US Dollar, allowing the pair to stretch higher. Warsh said that he remains committed to delivering price stability without giving away anything on future interest rate path.

USD/JPY falls in symc with USD, gives up 158.00 after Warsh's speech

USD/JPY has come under fresh selling pressure and gives up 158.00 in the Asian session on Friday amid the emergence of fresh US Dollar selling. Fed Chair Warsh's non-committal commentary on the future tightening path, weighs on the US Dollar and the pair.

Gold looks vacillating above $4,150

Gold alternates gains with losses below the key $4,200 mark per troy ounce on Friday. The yellow metal’s irresolute price action comes in response to a modest pullback in the US Dollar and a tepid recovery in US Treasury yields across the board.

Bitcoin steadies at $82,000: The five forces crushing the Uptober rally

Crypto markets have remained under pressure so far in October, with Bitcoin (BTC) sliding below $80,000 earlier this week before recovering to around $82,000 on Friday, as macroeconomic headwinds and cooling demand weigh on the market.

The Fed just got a second hot inflation number. Here's what the diesel signal is really saying

The Federal Reserve (Fed) faces a renewed inflation challenge after two consecutive reports showed price pressure intensifying across the US economy. September's Consumer Price Index (CPI) confirmed accelerating consumer inflation, while the Producer Price Index (PPI) revealed an even sharper rise in business costs. Behind both reports lies a common factor: energy prices.

Everyone's dumping Gold after hot US inflation. Here's why $4,100 could be a floor, not a cliff

Gold (XAU/USD) is recovering from a sharp sell-off triggered by hotter-than-expected United States (US) inflation data released on Wednesday. The precious metal briefly plunged toward $4,073 as investors increased their bets on further Federal Reserve (Fed) interest rate hikes before recovering as US Treasury yields and the US Dollar (USD) reversed their initial gains.