EUR/USD looking to regain high ground towards 1.06 after knocking back on Gaza-fueled risk aversion

The EUR/USD started Monday with a dip to 1.0519 before edging back.
The Euro still remains down against the US Dollar for Monday, but losses are paring back.
Market sentiment is rebalancing after getting knocked off-kilter by geopolitical escalations in the Gaza Strip.

Joshua Gibson FXStreet

The EUR/USD is testing upwards into 1.0570 after slipping down into 1.0520 to kick off the trading week. Market sentiment soured following a Hamas rocket attack in the Gaza Strip that killed over 700 people and spurred the Israeli government to mobilize an additional 100,000 troops into the region.

Concerned that nearby Iran and Saudi Arabia could get pulled into the escalating Gaza conflict, markets went risk-off in early Monday trading, but investor sentiment appears to have recovered and the Euro is easing back towards the day's opening bids.

Euro investors will be looking ahead to an upcoming speech from European Central Bank (ECB) President Christine Lagarde on Tuesday, who will be delivering talking points during the International Monetary Fund's (IMF) annual meeting currently underway in Morocco.

Forex Today: Safe-haven flows dominate as geopolitical tensions escalate on Israel-Hamas conflict

Wednesday sees US Producer Price Index (PPI) figures, with the annualized period into September forecast to increase from 2.2% to 2.%. Wednesday will also see the Federal Reserve's (Fed) latest meeting minutes getting published at 18:00 GMT.

In the late week will be a collection of speeches from ECB officials followed by the ECB's own published meeting minutes, followed by the US Consumer Price Index (CPI) printing, which is expected to decline slightly from 4.3% to 4.1% over the annualized period into September.

To close out the trading week will be the Michigan Consumer Sentiment Index for October, which is seen declining, albeit slightly, from 68.1 to 67.4.

EUR/USD Technical Outlook

The Euro is seeing some twisting intraday action with hourly candles cycling the 50-hour Simple Moving Average (SMA) that is rising into 1.0550, and the EUR/USD is currently testing 1.0565, down a scant 0.08% from the day's highs set early in the day at the market open.

EUR/USD daily candles remain notably bearish, with current price action trading far below the 50-day SMA, which has confirmed a bearish cross of the 200-day SMA near 1.0825. A declining trendline from July's tops near 1.1275 remains firmly in place, and the Euro's three-day rebound from 1.0448 still sees the EUR/USD trading near 2023's lows.

EUR/USD Hourly Chart

EUR/USD Daily Chart

EUR/USD Technical Levels

EUR/USD

Overview
Today last price	1.0567
Today Daily Change	-0.0020
Today Daily Change %	-0.19
Today daily open	1.0587

Trends
Daily SMA20	1.0613
Daily SMA50	1.0771
Daily SMA100	1.0843
Daily SMA200	1.0825

Levels
Previous Daily High	1.06
Previous Daily Low	1.0482
Previous Weekly High	1.06
Previous Weekly Low	1.0448
Previous Monthly High	1.0882
Previous Monthly Low	1.0488
Daily Fibonacci 38.2%	1.0555
Daily Fibonacci 61.8%	1.0527
Daily Pivot Point S1	1.0513
Daily Pivot Point S2	1.0439
Daily Pivot Point S3	1.0395
Daily Pivot Point R1	1.063
Daily Pivot Point R2	1.0674
Daily Pivot Point R3	1.0748

Author

Joshua Gibson

FXStreet

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

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