- EUR/USD plummets as speculation of a Fed pivot abated.
- US Services PMIs were mixed, though the ISM remained at expansionary territory.
- EU’s services activity weakened, except for France, growing at a mild pace.
The EUR/USD is erasing some of Tuesday’s gains as speculations of a Fed pivot towards a dovish stance faded, as shown by US T-bond yields rising again, while US Services PMI data, even though slowed, remains at expansionary territory. At the time of writing, the EUR/USD is trading at 0.9852 after hitting a daily high close to parity.
EUR/USD dropped on a strong US dollar
Sentiment deteriorated, as previously mentioned, as a possible Fed pivot faded. US economic data revealed during the day showed that private payrolls increased by 208K, as depicted by the ADP National Employment for September. Later in the day, economic activity in the Services sector showed mixed readings, though the ISM flashed that the economy is still expanding at a slower pace.
The S&P Global Services and Composite PMIs came at 49.3 and 49.5, respectively. Nevertheless, the ISM Non-Manufacturing PMI dived to 56.7, less than August’s 56.9 but exceeded estimations of 56.0. Given the backdrop, the US economy stayed resilient amidst an aggressive tightening cycle by the US Federal Reserve, therefore bolstering the greenback.
Hence, the EUR/USD dipped 130 pips on the day towards current exchange rates. In the meantime, the US 10-year Treasury bond yield is rising 16 bps, up at 3.781%, a headwind for the EUR/USD.
At the same time, the US Department of Commerce reported that the US Trade deficit narrowed by 4.3% to $67.4 billion in August, the lowest since May 2021.
Aside from this, the Eurozone reported that business activity slowed, as shown by the S&P Global PMI survey, further cementing the case of the EU’s getting into a recession as a stagflation scenario looms. Services activity weakened in Germany, Italy, and Spain, except for France, though it grew weaker than estimated.
EUR/USD Key Technical Levels
|Today last price||0.9855|
|Today Daily Change||-0.0131|
|Today Daily Change %||-1.31|
|Today daily open||0.9986|
|Previous Daily High||1|
|Previous Daily Low||0.9806|
|Previous Weekly High||0.9854|
|Previous Weekly Low||0.9536|
|Previous Monthly High||1.0198|
|Previous Monthly Low||0.9536|
|Daily Fibonacci 38.2%||0.9926|
|Daily Fibonacci 61.8%||0.988|
|Daily Pivot Point S1||0.9862|
|Daily Pivot Point S2||0.9737|
|Daily Pivot Point S3||0.9668|
|Daily Pivot Point R1||1.0055|
|Daily Pivot Point R2||1.0124|
|Daily Pivot Point R3||1.0249|
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.