- EUR/USD ticked higher in Asia on trade optimism.
- The pair is currently flirting with the stiff 21-day moving average hurdle.
- The tone of the ECB minutes and the US monthly inflation data to provide near-term clues.
EUR/USD is teasing a break above key hurdle while heading into the London open. The currency pair may end the day with solid gains if the European Central Bank minutes sound less dovish-than-expected.
The pair eked out 0.16% gains in Asia, as the markets offered US Dollars on trade optimism generated by a Bloomberg report stating that the US is planning to enter into a currency agreement with China. Further, The New York Times reported that the Trump administration may issue licenses that will allow some US companies to supply products to China's Huawei.
As of writing, the pair is 21-day moving average (MA) at 1.0987. The technical line has been capping upside since Oct. 3 and is the level to beat for the bulls. A close above the key MA would open the doors for a stronger corrective bounce, possibly to 1.1110 (Sept. 13 high).
Focus on the ECB minutes
The minutes of the European Central Bank's (ECB) September policy meeting are scheduled for release at 11:30 GMT.
The central bank lowered its deposit rate by 10 basis points to -0.50% in September and also announced a fresh bond-buying program, scheduled to begin from November.
The fresh stimulus announcement, however, was contentious. Governing Council member Robert Holzmann recently criticized the zero interest rate policy (ZIRP) in Europe, by stating that it leads to less growth and lower productivity.
The EUR may pick up a bid if the minutes underscore the growing dissent within the Governing Council. However, if the minutes show growing consensus regarding the need for more stimulus, the EUR could come under pressure – more so, as Federal Reserve's (Fed) September meeting minutes released on Wednesday showed increasing concern among some policymakers that financial markets are expecting more rate cuts than the US central bank will deliver this year.
Also, the American Dollar may find bids if the Consumer Price Index (MOM) (Sep) beats estimates by a big margin, forcing investors to scale back expectations of an October rate cut.
Technical levels
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
USD/JPY jumps above 156.00 on BoJ's steady policy
USD/JPY has come under intense buying pressure, surging past 156.00 after the Bank of Japan kept the key rate unchanged but tweaked its policy statement. The BoJ maintained its fiscal year 2024 and 2025 core inflation forecasts, disappointing the Japanese Yen buyers.
AUD/USD consolidates gains above 0.6500 after Australian PPI data
AUD/USD is consolidating gains above 0.6500 in Asian trading on Friday. The pair capitalizes on an annual increase in Australian PPI data. Meanwhile, a softer US Dollar and improving market mood also underpin the Aussie ahead of the US PCE inflation data.
Gold price flatlines as traders look to US PCE Price Index for some meaningful impetus
Gold price lacks any firm intraday direction and is influenced by a combination of diverging forces. The weaker US GDP print and a rise in US inflation benefit the metal amid subdued USD demand. Hawkish Fed expectations cap the upside as traders await the release of the US PCE Price Index.
Stripe looks to bring back crypto payments as stablecoin market cap hits all-time high
Stripe announced on Thursday that it would add support for USDC stablecoin, as the stablecoin market exploded in March, according to reports by Cryptocompare.
US economy: Slower growth with stronger inflation
The US Dollar strengthened, and stocks fell after statistical data from the US. The focus was on the preliminary estimate of GDP for the first quarter. Annualised quarterly growth came in at just 1.6%, down from the 2.5% and 3.4% previously forecast.