EUR/USD remains under pressure with Fed's Powell on focus

The Euro hovers near recent lows with upside attempts capped below 1.1600.
Risk appetite remains subdued as trade tensions between the US and China flare up.
German ZEW data revealed that the economic sentiment improved less than expected in October.

Guillermo Alcala FXStreet

EUR/USD holds losses for the second consecutive day on Tuesday, trading right below 1.1560 after having retested two-month lows at 1.1542 earlier on the day. A risk-off mood on concerns of a Sino-US trade war is keeping the safe-haven US Dollar buoyed, with all eyes on the Federal Reserve's (Fed) chairman Jerome Powell's conference.

News that China and the United States have raised their fees on each other's vessels has reactivated concerns about a trade war between the world's two major economies on Tuesday. This has dampened previous hopes of a de-escalation, following US Treasury Secretary Scot Bessent's announcement on Monday of an upcoming meeting between US President Donald Trump and his Chinese counterpart, Xi Jinping.

In Germany, the ZEW Economic Sentiment Index has shown a moderate im¡provement in October, but is still short of the market expectations, while the sentiment about the current economic situation deteriorated to its lowest levels since May. Somewhat earlier, Destatis figures confirmed that German consumer inflation accelerated to 2.4% in September from 2.2% in August, in line with the preliminary reading. The Euro (EUR) edges lower following the data release.

The US economic docket remains thin, amid a data blackout from the US federal government. Still, Federal Reserve (Fed) Chairman Jerome Powell will speak later today. However, in the absence of hard data to contextualize his comments, he is unlikely to alter market expectations of two interest rate cuts by the central bank in the next two meetings.

Euro Price Today

The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the Australian Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.15%	0.56%	-0.09%	0.21%	0.96%	0.66%	0.07%
EUR	-0.15%		0.41%	-0.25%	0.06%	0.84%	0.52%	-0.07%
GBP	-0.56%	-0.41%		-0.65%	-0.34%	0.42%	0.14%	-0.48%
JPY	0.09%	0.25%	0.65%		0.31%	1.03%	0.72%	0.12%
CAD	-0.21%	-0.06%	0.34%	-0.31%		0.78%	0.45%	-0.14%
AUD	-0.96%	-0.84%	-0.42%	-1.03%	-0.78%		-0.32%	-0.91%
NZD	-0.66%	-0.52%	-0.14%	-0.72%	-0.45%	0.32%		-0.59%
CHF	-0.07%	0.07%	0.48%	-0.12%	0.14%	0.91%	0.59%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).

Daily digest market movers: The US Dollar appreciates amid trade war fears

Market hopes that US President Trump's softer tone towards China would lead to a new de-escalation of the trade rift have been crushed by news that China has started charging higher fees to US cargo vessels, in a move that will be responded to in the US, opening a new front in trade hostilities.
Apart from that, Chinese authorities have dampened tensions between the two countries, as Beijing accused the US of having "double standards" and the commerce ministry affirmed that the US cannot seek dialogue, while threatening new measures.
All this stems from China's decision to impose restrictions on rare earth exports to Western countries announced last week, which was responded to by Trump with a threat of 100% levies on Chinese imports effective on November 1, which rattled financial markets and sent the US Dollar tumbling last Friday.
On the macroeconomic front, October's German ZEW Economic Sentiment Index improved to 39.3 from 37.3 in September, but the Current Situation Index dropped to -80.0 from -76.4, against market expectations of a mild improvement to -75. The Eurozone Economic Sentiment declined to 22.7 from 26.1 against expectations of an improvement to 30.2.
Earlier on Tuesday, German Consumer Prices Index (CPI) data showed a 0.2% increase in September and a 2.4% year-on-year growth, accelerating from 0.1% and 2.2%, respectively, in August. The Harmonized Index of Consumer Prices (HICP) has revealed the same figures.
Later on the day, the German ZEW Economic Sentiment Index is expected to show a moderate improvement, yet with the gauge measuring the current economic situation steady at historically low levels.

Technical Analysis: EUR/USD is under bearish pressure below 1.1600

EUR/USD remains on its back foot after failing to regain the 1.1600 level on Monday. Technical indicators in the 4-hour chart highlight the bearish momentum, with the Relative Strength Index (RSI) capped below the 50 level and the Moving Average Convergence Divergence (MACD) about to cross below the signal line.

Support at Monday's low of 1.1542 is holding bears for now, but it remains under pressure as upside attempts keep finding sellers. Further down, the August 5 low, at 1.1530, and the base of the descending channel, in the area of 1.1525, will come into focus.

To the upside, the intraday high is at 1.1590, ahead of Monday's peak of 1.1630. Further up, the top of the descending channel comes at the 1.1680 area.

Economic Indicator

Fed's Chair Powell speech

Jerome H. Powell took office as a member of the Board of Governors of the Federal Reserve System on May 25, 2012, to fill an unexpired term. On November 2, 2017, President Donald Trump nominated Powell to serve as the next Chairman of the Federal Reserve. Powell assumed office as Chair on February 5, 2018.

Economic Indicator

Fed's Bowman speech

Michelle W. Bowman" is an American attorney and the Vice Chair for Supervision on the Board of Governors of the Federal Reserve. Bowman has served as a member of the Board of Governors since taking office on November 26, 2018, and her term ends on January 31, 2034.

GBP/USD loses momentum, flirts with 1.3200

GBP/USD is struggling to maintain its positive bias on Thursday, retreating toward the 1.3200 region in response to the pick in the buying interest around the Greenback. That said, Cable remains under scrutiny as cautious market sentiment keeps investors focused on the US-Iran conflict and political effervescence in the UK.

EUR/USD trims gains, challenges 1.1400

EUR/USD now gives away part of its earlier advance, receding toward the 1.1400 contention zone on Thursday. Meanwhile, the pair’s recovery comes amid extra losses in the US Dollar, at the time when while investors continue to monitor developments in the Middle East and sentiment surrounding global technology stocks.

Gold remains bid and close to $4,100

Gold accelerates its recovery and approaches the key $4,000 mark per troy ounce at the end of the week, adding to Thursday’s advance. However, expectations for a hawkish Fed remain steady and keep the yellow metal’s potential upside contained.

Crypto Today: Bitcoin at $60,000, Ethereum at $1,500, and XRP at $1 face a make-or-break test

Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) are trading in the red on Friday after three consecutive days of losses, testing their respective make-or-break support levels.

Week ahead – NFP report to challenge Dollar strength and the hawkish Fed

Dollar strength dominates markets, as the hawkish Fed overshadows geopolitics and lower oil prices. NFP week could drive September Fed hike expectations and boost market volatility. The euro lacks fresh bullish catalysts, all eyes on the preliminary inflation report and the ECB Forum.

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.