|

EUR/USD rebounds to 1.0850 as market sentiment improves, US Inflation in focus

  • EUR/USD recovers to 1.0850 as market sentiment turns cheerful.
  • The ECB is expected to keep its Main Refinancing Operations Rate unchanged at 4.5% on Thursday.
  • The next move in the US Dollar will be guided by the US Inflation data for March.

The EUR/USD pair bounces back to 1.0850 in Monday’s early American session as appeal for risky assets improve. Market sentiment is positive even though traders pare bets supporting Federal Reserve (Fed) rate cuts, which were leaned for the June meeting. The S&P 500 futures open on a slightly positive note. 10-year US Treasury yields rose to four-month high near 4.43% as Fed rate cut expectations have shifted for the second half of this year.

Meanwhile, the US Dollar turns subdued despite robust US Nonfarm Payrolls (NFP) data for March dent rate cut hopes. The US Dollar Index (DXY), which tracks the US Dollar’s value against six major currencies, falls slightly to 104.30.

Going forward, investors will focus on the US Consumer Price Index (CPI) for March, which will be published on Wednesday. Annual headline inflation is forecasted to have accelerated to 3.4% from 3.2% in February. In the same period, the core CPI that strips off volatile food and Oil prices is estimated to have dipped slightly to 3.7% from 3.8%.

Strong price pressures could keep hopes of rate cuts for June off the table, while soft figures could prompt speculation for the Fed pivoting to rate cuts in the same period.

On the Eurozone front, investors shift focus to the European Central Bank’s (ECB) interest rate decision, which will be announced on Thursday. The ECB is widely anticipated to keep its key borrowing rates steady at 4.5%. While investors will focus on more cues about when the ECB will pivot to rate cuts.

EUR/USD

Overview
Today last price1.0848
Today Daily Change0.0010
Today Daily Change %0.09
Today daily open1.0838
 
Trends
Daily SMA201.085
Daily SMA501.0829
Daily SMA1001.0875
Daily SMA2001.0833
 
Levels
Previous Daily High1.0848
Previous Daily Low1.0791
Previous Weekly High1.0876
Previous Weekly Low1.0725
Previous Monthly High1.0981
Previous Monthly Low1.0768
Daily Fibonacci 38.2%1.0826
Daily Fibonacci 61.8%1.0813
Daily Pivot Point S11.0803
Daily Pivot Point S21.0769
Daily Pivot Point S31.0747
Daily Pivot Point R11.086
Daily Pivot Point R21.0882
Daily Pivot Point R31.0917

Author

Sagar Dua

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

More from Sagar Dua
Share:

Editor's Picks

AUD/USD bulls regain control above 0.6950 amid USD retreat

AUD/USD regains traction and extends the previous day's bounce from the weekly low, aiming for 0.7000 in Asia on Friday. The overnight pullback in US bond yields keeps the US Dollar below an 18-month high, which in turn offers some support to the pair. Meanwhile, hawkish RBA expectations also keep the major underpinned.

USD/JPY holds gains near 158.00 after Japan's weak Household Spending data

USD/JPY clings to gains around 158.00 after data showed on Friday that Japan's Household Spending fell for the ninth straight month, undermining the Japanese Yen. Meanwhile, the US Dollar remains depressed as the overnight fall in US bond yields counters a hawkish Fed and geopolitical uncertainties, could cap any downside in the pair.

Gold remains range-bound below $4,200

Gold has given up some ground after an initial bullish attempt to reach weekly highs, returning to below the $4,200 mark per troy ounce on Friday. The US Dollar’s strong upside momentum, combined with rising US Treasury yields across the curve, seems to keep further gains in the yellow metal under scrutiny.

Week ahead: US CPI, France’s budget crisis and Q3 earnings to set the market tone
The US dollar held relatively strong this week, despite the disappointing US jobs report on October 2, which further decreased the probability of a back-to-back rate hike by the Fed at the upcoming gathering on October 28.
CFTC Report: Euro and Aussie shorts expand amid diverging signals

The week in one sentence: Euro and Australian Dollar shorts deepened in the week to October 6, while Yen longs rebuilt. In addition, Coffee buying continued, and Gold exposure remained elevated despite another price decline. Speculators turned more negative on the Euro, increasing the net exposure to around 99.3K contracts.

Has Bitcoin really escaped the macro forces it was built to fight?
Over 17 years ago, Satoshi Nakamoto designed Bitcoin (BTC) on the back of a global financial crisis as an alternative to the global monetary system outside the control of central banks, governments and traditional intermediaries. This raises a key question: has Bitcoin really become independent of the macroeconomic forces it was built to challenge?