EUR/USD grinds higher past 1.0500 with eyes on ECB President Lagarde


  • EUR/USD treads water after snapping two-day downtrend, stays defensive of late.
  • Downbeat US Treasury yields, softer US data favor broad-based US Dollar weakness.
  • Firmer EU statistics, hawkish ECB survey underpin bullish bias amid sluggish session.

EUR/USD struggles to defend the previous day’s corrective bounce around 1.0510-15 during Thursday’s Asian session. In doing so, the major currency pair portrays the market’s inaction amid a light calendar and mixed sentiment. However, the scheduled speech from European Central Bank (ECB) President Christine Lagarde and weekly prints of the US Initial Jobless Claims will be important for near-term clear directions for the pair traders.

Final prints of the Eurozone Gross Domestic Product (GDP) for the third quarter (Q3) improved to 0.3% QoQ versus 0.2% previous estimations. On the same line was the YoY number of 2.3% and the upward revision of the yearly prior figures to 4.2% versus 2.1% flash estimations. Further, German Industrial Production also improved to -0.1% MoM versus -0.5% expected and 0.6% prior while Eurozone Employment Change rose to 1.8% YoY during the Q3 2022 against 1.7% expected and previous readings. Additionally, strong prints of the ECB survey of consumer expectations for inflation also favor the Euro.

On the other hand, US Dollar Index (DXY) dropped 0.37% to 105.17 by the end of Wednesday’s North American session. The DXY weakness could also be linked to the softer US data, namely the trade balance and Unit Labour Costs for the third quarter (Q3). It should be noted that the US Goods and Services Trade Balance deteriorated to $-78.2 billion versus $-79.1 billion expected and $-73.28 billion prior. Further, the final readings of the Unit Labour for Q3 eased to 2.4% QoQ versus 3.5% first estimations.

Also exerting downside pressure on the DXY could be the weaker US Treasury bond yields. That said, the benchmark 10-year Treasury bond yields dropped to the lowest levels since early September by losing 3.30% in a day to 3.42% level at the latest. Further, the two-year counterpart dropped 2.54% to the 4.26% mark. With this, the US Treasury bond yield curve, the difference between the long-dated and the short-term bond yields, inverted the most in over forty years.

Elsewhere, China announced multiple measures to ease the three-year-long Zero-Covid policy and bolstered the market sentiment before the risk appetite weakened. The dragon nation’s downbeat prints of the Trade Balance, Imports and Exports seemed to have probed the positive vibes. On the other hand, Russian President Vladimir Putin teased a nuclear war by saying that nuclear weapons could be used to defend itself and its allies.

Moving on, a speech from ECB President Lagarde and the weekly prints of the US Jobless Claims will be important for the EUR/USD traders.

Technical analysis

A one-month-old rising wedge bearish chart formation keeps EUR/USD sellers hopeful unless the quote crosses the 1.0625 hurdle. Alternatively, 1.0435 acts as the trigger for the pair’s theoretical downward trajectory backed by the rising wedge confirmation.

Additional important levels

Overview
Today last price 1.0513
Today Daily Change 0.0043
Today Daily Change % 0.41%
Today daily open 1.047
 
Trends
Daily SMA20 1.0359
Daily SMA50 1.0055
Daily SMA100 1.0056
Daily SMA200 1.0361
 
Levels
Previous Daily High 1.0533
Previous Daily Low 1.046
Previous Weekly High 1.0545
Previous Weekly Low 1.029
Previous Monthly High 1.0497
Previous Monthly Low 0.973
Daily Fibonacci 38.2% 1.0488
Daily Fibonacci 61.8% 1.0505
Daily Pivot Point S1 1.0442
Daily Pivot Point S2 1.0414
Daily Pivot Point S3 1.0368
Daily Pivot Point R1 1.0515
Daily Pivot Point R2 1.0561
Daily Pivot Point R3 1.0589

 

 

Share: Feed news

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


Recommended content

Editors’ Picks

EUR/USD stays below 1.0700 after upbeat US PMI data

EUR/USD stays below 1.0700 after upbeat US PMI data

EUR/USD stays on the back foot and trades in negative territory below 1.0700 as the US Dollar benefits from upbeat data in the American session. S&P Global reported that the economic activity in the US private sector continued to expand at a robust pace in June.

EUR/USD News

GBP/USD drops to fresh multi-week low below 1.2650

GBP/USD drops to fresh multi-week low below 1.2650

GBP/USD remains under bearish pressure and trades at its lowest level since mid-May below 1.2650. The stronger-than-forecast Manufacturing and Services PMI data from the US helps the USD hold its ground and causes the pair to stretch lower.

GBP/USD News

Gold drops below $2,340 as US yields rebound

Gold drops below $2,340 as US yields rebound

Gold loses its traction and trades deep in the red below $2,340 in the second half of the day on Friday. The benchmark 10-year US Treasury bond yield pushes higher following the upbeat PMI data from the US, weighing on XAU/USD.

Gold News

Bitcoin retraces to crucial support

Bitcoin retraces to crucial support

Bitcoin price encounters resistance at weekly highs before retracing to seek support at a crucial level, while Ethereum and Ripple align closely with Bitcoin's movements, gearing up to surpass resistance barriers and embark on upward rallies.

Read more

Week ahead – US PCE inflation the highlight of a relatively light agenda

Week ahead – US PCE inflation the highlight of a relatively light agenda

Core PCE inflation to test bets of two Fed rate cuts in 2024. Yen awaits BoJ Summary of Opinions, Tokyo CPI. Canadian CPI data also enters the spotlight.

Read more

Forex MAJORS

Cryptocurrencies

Signatures