EUR/USD remains under pressure below 1.09 ahead of data

EUR/USD clinched new YTD lows around 1.0880, rebounds afterwards.
Sellers remain in control and look for a move to 1.0840.
EMU flash CPI coming up next on the docket.

Pablo Piovano FXStreet

The selling bias around the European currency remains everything but abated ion the first half of the week, with EUR/USD testing fresh 2019 lows in the 1.0880 region.

EUR/USD offered ahead of CPI

Spot is down for the second session in a row on Tuesday, keeping the bearish stance intact particularly after the recent break below the key support at 1.09 the figure.

It is worth recalling that the pair accelerated the downside on Monday after German flash inflation figures for the month of September came in short of expectations, showing further evidence of the loss of upside traction of consumer prices in the economy.

Later in the day, final September manufacturing PMIs are due in Euroland, although the attention will be on the advanced CPI for the region during the same period. Across the pond, the always-relevant ISM manufacturing will be in centre stage along with Fedspeak.

What to look for around EUR

EUR dropped to new 2-year lows vs. the Greenback in the 1.0880/75 band earlier in the session, as investors’ sentiment remains sour and without any hint of getting any better, at least in the near/medium term. In fact, the slowdown in the euro area stays far from abated and carries the potential to deteriorate further, as per the latest PMIs in core Euroland and despite the lacklustre improvement in a couple of German sentiment gauges. Speaking of Germany, the likeliness that the country could slip back into recession in the third quarter just adds to the already gloomy panorama for the bloc and weighs further on the single currency. The unremitting slowdown in the region does nothing but justify the ‘looser for longer’ monetary stance by the ECB. On another front, potential US tariffs on imports of EU cars remain well on the table, while the Brexit limbo and UK politics adds to the ongoing concerns.

EUR/USD levels to watch

At the moment, the pair is retreating 0.06% at 1.0890 and a breach of 1.0879 (2019 low Oct.1) would target 1.0839 (monthly low May 11 2017) en route to 1.0569 (monthly low Apr.10 2017). On the upside, the next hurdle aligns at 1.1003 (21-day SMA) followed by 1.1109 (monthly high Sep.13) and finally 1.1163 (high Aug.26).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

GBP/USD weakens to two-week lows near 1.3520

GBP/USD trades on the back foot, returning to the low 1.3500s, or two-week troughs, on Tuesday. Cable’s bearish price action follows decent gains in the Greenback at the time when investors assess latest US data releases and the persistent uncertainty in the US-Iran crisis.

EUR/USD remains offered; breaks below 1.1600

EUR/USD now accelerates its daily correction, breaching below the key 1.1600 support level on Tuesday. The pair’s daily correction comes on the back of a decent bounce in the US Dollar despite disappointing US data releases and amid persistent geopolitical concerns.

Gold bears eye $4,300 breakdown amid Fed hike bets, Iran risks, firm USD

Gold languishes near a two-and-a-half-week low, touched during the Asian session on Wednesday, awaiting a break below $4,300 before the next leg down. Escalating US-Iran tensions lift oil prices to a nearly six-week high and fuel inflation fears, reaffirming Fed rate-hike bets. This acts as a tailwind for the safe-haven US Dollar and undermines demand for the non-yielding bullion.

RBNZ set to raise interest rate to 2.75%

The Reserve Bank of New Zealand (RBNZ) is on track to deliver a follow-through interest rate hike, raising the Official Cash Rate (OCR) by another 25 basis points (bps) from 2.50% to 2.75% on Wednesday. Experts expect a consensus decision this week, unlike a deeply divided outcome predicted during the July monetary policy meeting.

Global bond market sell off haunts markets

Global sovereign bonds are selling off as we start a new month. The UK is, unsurprisingly, taking the biggest hit. Two and 10-year yields rose by 10 basis points at one point on Tuesday, and are currently higher by 7 and 8bps respectively.

Diesel’s record $100 warning: The oil shock hiding in plain sight

The Oil market may look calmer than it did a few months ago, but diesel is sending a very different message. The US diesel crack spread, the premium of ultra-low sulphur diesel futures over WTI, recently surged above $100 per barrel for the first time, reaching an intraday record of just over $102.00.