- EUR/USD struggles to keep the rebound near multi-day top.
- US dollar ignores firmer Treasury yields amid risk-on mood.
- ECB hawks brace for Thursday, easy covid numbers add to the market’s optimism.
- Eurozone GDP revision, ZEW numbers can entertain buyers but all eyes on ECB tapering chatters.
EUR/USD pares intraday gains below 1.1900, up 0.08% on a day around 1.1880 heading into Tuesday’s European session. In doing so, the currency major pair cheers US dollar weakness while taking rounds to the multi-day top marked last Friday.
US Dollar Index (DXY) drops 0.07% intraday to 92.14 by the press time amid risk-on markets. The upbeat sentiment takes clues from easing coronavirus fears and vaccine hopes, as well as escalating chatters over the European Central Bank (ECB) tapering. Furthermore, the US traders’ return from the holiday starts the week with old tunes surrounding dismal US jobs reports and favor the positive mood.
Australia, New Zealand and Japan mark the reduction in the COVID-19 numbers and tease plans of how they could overcome the pandemic, especially in Australia. Also adding to the optimism are the talks surrounding booster shots and faster covid vaccinations.
Also, markets keep piling on the bets of the ECB’s hawkish hold this week even as French central bank chief Francois Villeroy de Galhau argues that “The first P in PEPP stands for a pandemic, not permanent, and a good reason.” On Monday, The European Union (EU) Economy Commissioner Paolo Gentiloni said, per Bloomberg, "I think it would be a big mistake because the mainstream consensus is on the fact that this inflation is still a temporary phenomenon."
The ECB is up for fueling the market moves on Thursday as not event traders but the policymakers are also divided over the bond purchase plan of the bloc’s central bank amid recently improving economics.
Read: The dollar story ahead of ECB
On the other hand, chatters surrounding the Fed’s tapering seem to have already faded after the latest disappointment from the US jobs report.
Amid these plays, the US 10-year Treasury yields begin the week’s trading on a firmer not around 1.34% whereas S&P 500 Futures rise 0.13% intraday to 4,540 at the latest.
Moving on, the second reading of the Eurozone Q2 GDP and ZEW sentiment numbers for the region, as well as for Germany, for September, may offer immediate direction to the EUR/USD prices. However, major attention will be given to how the US and Canadian traders respond to the latest market catalysts.
Technical analysis
Firmer oscillators back EUR/USD bulls inside a two-week-old rising channel, currently between 1.1920 and 1.1860. It should be noted, however, that the double tops formed around 1.1910 become the key hurdle to cross for the pair buyers.
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 holds steady near 1.0650 amid risk reset
EUR/USD is holding onto its recovery mode near 1.0650 in European trading on Friday. A recovery in risk sentiment is helping the pair, as the safe-haven US Dollar pares gains. Earlier today, reports of an Israeli strike inside Iran spooked markets.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD is rebounding toward 1.2450 in early Europe on Friday, having tested 1.2400 after the UK Retail Sales volumes stagnated again in March, The pair recovers in tandem with risk sentiment, as traders take account of the likely Israel's missile strikes on Iran.
Gold price defends gains below $2,400 as geopolitical risks linger
Gold price is trading below $2,400 in European trading on Friday, holding its retreat from a fresh five-day high of $2,418. Despite the pullback, Gold price remains on track to book the fifth weekly gain in a row, supported by lingering Middle East geopolitical risks.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Geopolitics once again take centre stage, as UK Retail Sales wither
Nearly a week to the day when Iran sent drones and missiles into Israel, Israel has retaliated and sent a missile into Iran. The initial reports caused a large uptick in the oil price.