- EUR/USD prints seven-day uptrend, pokes monthly top of late.
- DXY keeps diverging from US Treasury yields amid Fed tapering, Evergrande headlines.
- ECB policymakers try to placate reflation fears but firmer data probes policy doves.
- Risk catalysts, second-tier US data and Eurozone Consumer Confidence eyed for fresh impulse.
EUR/USD flirts with the monthly high near the 1.1670 hurdle, taking rounds to 1.1665 ahead of Thursday’s European session. The major currency pair rises for the seventh consecutive day with this pattern as the US Dollar Index (DXY) refreshes a three-week low despite firmer Treasury yields.
The US Dollar Index (DXY) fails to benefit from the consolidation in the market sentiment, printing a seven-day downtrend to a fresh three-week low near 93.50 by the press time. That being said, the US 10-year Treasury yields remain firm around 1.67%, up three basis points (bps) to refresh the highest levels since May.
Tapering signals from Federal Reserve Governor Randal Quarles and Cleveland Fed President Loretta Mester have been the latest to pump the US 10-year Treasury yields. However, the same couldn’t help the EUR/USD sellers as firmer Euro-zone inflation figures dim the European Central Bank (ECB) policymakers’ efforts to tame the hawkish bets.
On Wednesday, the final reading of the bloc’s Consumer Price Index (CPI) for September grew past 0.4% initial estimate to 0.5% MoM while matching 3.4% forecasts. Following that, the ECB’s Francois Villeroy de Galhau and Pierre Wunsch tried their best to defy the monetary policy tightening but couldn’t convince markets.
It’s worth noting that US President Joe Biden’s attempts to convince markets of upcoming stimulus failed to recall the greenback buyers as upbeat equities derail the USD’s safe-haven demand.
Looking forward, US Jobless Claims, Philadelphia Fed Manufacturing Index and Existing Home Sales may entertain short-term EUR/USD traders ahead of the Eurozone’s preliminary Consumer Confidence data for October. Above all, Friday’s activity numbers and chatters surrounding the Fed, ECB and China will be the key for the pair. Additionally, the US Treasury yields should be watched carefully as a clear break of 1.70% triggered the US dollar rally in the past.
Technical analysis
EUR/USD needs a daily closing beyond 1.1670, comprising August lows, to aim for the September 22 swing bottom around 1.1685 and 50% Fibonacci retracement (Fibo.) of July-October upside near 1.1715. However, failures to do so may not necessarily recall the bears until the quote stays beyond 1.1615 support confluence including 21-DMA, as well as 23.6% Fibo.
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 retreats toward 1.0850 on modest USD recovery
EUR/USD stays under modest bearish pressure and trades in negative territory at around 1.0850 after closing modestly lower on Thursday. In the absence of macroeconomic data releases, investors will continue to pay close attention to comments from Federal Reserve officials.
GBP/USD holds above 1.2650 following earlier decline
GBP/USD edges higher after falling to a daily low below 1.2650 in the European session on Friday. The US Dollar holds its ground following the selloff seen after April inflation data and makes it difficult for the pair to extend its rebound. Fed policymakers are scheduled to speak later in the day.
Gold climbs to multi-week highs above $2,400
Gold gathered bullish momentum and touched its highest level in nearly a month above $2,400. Although the benchmark 10-year US yield holds steady at around 4.4%, the cautious market stance supports XAU/USD heading into the weekend.
Chainlink social dominance hits six-month peak as LINK extends gains
-637336005550289133_XtraSmall.jpg)
Chainlink (LINK) social dominance increased sharply on Friday, exceeding levels seen in the past six months, along with the token’s price rally that started on Wednesday.
Week ahead: Flash PMIs, UK and Japan CPIs in focus – RBNZ to hold rates
After cool US CPI, attention shifts to UK and Japanese inflation. Flash PMIs will be watched too amid signs of a rebound in Europe. Fed to stay in the spotlight as plethora of speakers, minutes on tap.