EUR/USD holds steady near 1.1600 amid upbeat mood, US data eyed


  • EUR/USD consolidates the upside before the next leg higher, US data eyed.
  • The US dollar licks hotter US inflation-inflicted wounds amid an upbeat market mood.
  • FOMC minutes point to November taper, US CPI brings forward rate hike expectations.

EUR/USD is trading close to 1.1600, gathering strength for the next push higher. The US dollar licks hotter US inflation-inflicted wounds amid an upbeat market mood.

The main currency pair holds the recent advance, currently trading 0.05% higher at 1.1595, as the bulls catch a breather after Wednesday’s 70-pips surge. The rebound in the US Treasury yields across the curve helps cushion the downside in the greenback, capping EUR/USD’s upside for now.

Further, the gains could remain limited, as investors will continue to weigh in the divergent monetary policy outlooks between the Fed and ECB.

Hotter US CPI downs the dollar

On Wednesday, the major staged an impressive comeback from near 15-month lows of 1.1524 and briefly tapped the 1.1600 level.

The pair surged after the hotter-than-expected US Consumer Price Index (CPI) brought forward the Fed’s rate hike expectations and triggered a sharp sell-off in the longer-dated Treasury yields alongside a dollar squeeze. The US annualized CPI rose to 5.4% YoY in September vs. 5.3% expected while the Core CPI steadied at 4% YoY.

The spot extended the break higher on the FOMC minutes release, as markets resorted to ‘sell the fact’ trading in the dollar after the September meeting’s minutes revealed that the Fed officials are prepared for a gradual taper, which is expected to “in either mid-November or mid-December.

Looking ahead, the pair will await the US Producers Price Index (PPI), the weekly Jobless Claims and Fedspeak for fresh trading impetus. In the meantime, the Fed sentiment and dynamics in the yields and the buck will be closely followed.

EUR/USD: Technical levels to consider

EUR/USD

Overview
Today last price 1.1594
Today Daily Change 0.0001
Today Daily Change % 0.01
Today daily open 1.1593
 
Trends
Daily SMA20 1.1641
Daily SMA50 1.1727
Daily SMA100 1.1836
Daily SMA200 1.1939
 
Levels
Previous Daily High 1.1597
Previous Daily Low 1.1529
Previous Weekly High 1.164
Previous Weekly Low 1.1529
Previous Monthly High 1.1909
Previous Monthly Low 1.1563
Daily Fibonacci 38.2% 1.1571
Daily Fibonacci 61.8% 1.1555
Daily Pivot Point S1 1.1549
Daily Pivot Point S2 1.1505
Daily Pivot Point S3 1.1481
Daily Pivot Point R1 1.1617
Daily Pivot Point R2 1.1642
Daily Pivot Point R3 1.1686

 

 

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