• EUR/USD advances sharply ahead of US NFP and next week’s ECB monetary policy decision.
  • Cleveland’s Fed Mester expects Fed funds rates above 4% and would like to hold them higher for longer.
  • ECB’s hawks expect at least a 50 bps increase at September 8 meeting.
  • Money market futures estimate the ECB would hike 125 bps by October.

EUR/USD is recording decent gains in the North American session amidst a risk-off mood, courtesy of further hawkish Fed commentary, with Cleveland’s Fed Mester taking the stand. At the same time, month-end flows weighed on the greenback.

The EUR/USD opened near parity before sliding towards the day’s lows at 0.9971 before climbing sharply, reaching a daily high at 1.0076 on month-end flows. At the time of writing, the EUR/USD is trading at 1.0059, above its opening price.

During the New York session, Cleveland’s Fed President Loretta Mester emphasized that rates in the US need to be above 4% by 2023 and reiterated the Fed needs to “hold it there.” Mester added that she does not foresee rate cuts in 2023 while acknowledging that even though recession fears had risen, they are not part of her baseline.

In the meantime, the US economic docket featured the US ADP August’s figures, the first one, after pausing due to changes made to the report. Private hirings rose by 132K less than July’s 270K. Later, the Chicago PMI for August increased more than estimated, topping 52.2 vs. 52 expected by analysts.

In the meantime, the Euro area energy crisis continues to worsen. The Nordstream 1 pipeline entered three-day maintenance, as reported by Gazprom, keeping investors uneasy amid a period of high energy prices. In the meantime, EU’s inflation rose 9.1% YoY, higher than estimates, while core readings, which extract volatile items, also rose 4.3%.

Last reports about the Nordstream 1, Gazprom commented that Siemens could not hold regular equipment maintenance for the pipeline via Interfax. The natural gas pipeline works at a 20% capacity.

Elsewhere, ECB’s hawks are all over the place, crossing wires. The first one was Rehn, which expressed that although the economic outlook has darkened, monetary policy needs to normalize. He foresees further rate hikes coming. Later ECB’s Holtzmann commented that 50 bps is the minimum for September while adding that 75 bps need to be thrown into discussions.

What to watch

The euro area economic calendar will reveal German Retail Sales, amongst a tranche of S&P Global Manufacturing PMIs readings. On the US front, the docket will feature unemployment claims, the S&P Global PMI, and, most importantly, the ISM Manufacturing PMI.

EUR/USD Key Technical Levels

EUR/USD

Overview
Today last price 1.0059
Today Daily Change 0.0044
Today Daily Change % 0.44
Today daily open 1.0015
 
Trends
Daily SMA20 1.0117
Daily SMA50 1.0206
Daily SMA100 1.0414
Daily SMA200 1.0815
 
Levels
Previous Daily High 1.0055
Previous Daily Low 0.9982
Previous Weekly High 1.009
Previous Weekly Low 0.9901
Previous Monthly High 1.0486
Previous Monthly Low 0.9952
Daily Fibonacci 38.2% 1.0027
Daily Fibonacci 61.8% 1.001
Daily Pivot Point S1 0.998
Daily Pivot Point S2 0.9944
Daily Pivot Point S3 0.9907
Daily Pivot Point R1 1.0052
Daily Pivot Point R2 1.009
Daily Pivot Point R3 1.0125

 

 

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.

Feed news Join Telegram

Recommended content


Recommended content

Editors’ Picks

EUR/USD struggles to gather momentum, stays near 1.0350

EUR/USD struggles to gather momentum, stays near 1.0350

EUR/USD is having a difficult time gathering bullish momentum and fluctuating at around 1.0350 in the American session. With Wall Street's main indexes pushing lower after the opening bell, the US Dollar is gathering strength and not allowing the pair to gain traction.

EUR/USD News

GBP/USD falls below 1.2000 as mood sours

GBP/USD falls below 1.2000 as mood sours

GBP/USD has turned south and declined below 1.2000 in the second half of the day on Tuesday. The negative shift witnessed in risk sentiment seems to be helping the US Dollar find demand and forcing the pair to stay on the back foot.

GBPUSD News

Gold retreats to $1,750 area as US yields edge higher

Gold retreats to $1,750 area as US yields edge higher

Gold price lost its traction during the American trading hours and retreated to the $1,750 area. The benchmark 10-year US Treasury bond yield is up 1% on the day slightly above 3.7%, not allowing XAU/USD to build on earlier gains.

Gold News

Bitcoin price hears jingle bells rolling in

Bitcoin price hears jingle bells rolling in

Bitcoin price looks set to rally substantially higher now that the social unrest in China is calming down. BTC could stage a 17% rally in the coming week.

Read more

Alibaba shares advance 5% on reduced China covid restrictions

Alibaba shares advance 5% on reduced China covid restrictions

BABA stock has jumped more than 5.2% in Tuesday’s premarket to $80 after China's National Health Commission said covid-related lockdowns should end as soon as possible. 

Read more

Forex MAJORS

Cryptocurrencies

Signatures