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EUR/USD retreats from 1.1655 highs, steady around 1.1625 after Fed’s Powell comments

  • EUR/USD shed previous daily gains on Fed’s Chairman Powell amid US dollar weakness.
  • EUR/USD clingd to its daily wins amid lower US T-bond yields.
  • The EUR/USD 1-hour chart depicts the shared currency trading below the 100-SMA, opening the door for a 1.1600 test.

The EUR/USD climbs during the New York session, gaining a minimal 0.03% trading at 1.1627 at the time of writing. During the last couple of hours, the single currency printed a new daily high at 1.1655 but retreated towards 1.1621, on Federal Reserve Chairman Jerome Powell’s remarks.

Powell’s comments dented the market sentiment

Previous to the Fed’s Chairman Powell speech, the market sentiment was upbeat. As he progressed on his speech and through the Q&A session, investors’ mood switched towards a risk-off as portrayed by falling US equity markets. In the meantime, the US Dollar Index, which tracks the buck’s performance versus six rivals, slides 0.11%, currently at 93.66, whereas the US 10-year Treasury yield retraced the upside move to sit at 1.643%, three basis points lower than the open.

Jerome Powell said that the Fed is on track to begin the taper, and if the economy evolves as they (the Fed) expected, it will be completed by the first half of 2022. He reiterated that although he favors the timing of the QE reduction, he added, “I don’t think it is time to raise rates.”

Eurozone and US PMI barely moved the EUR/USD pair

On the macroeconomic front, the Eurozone docket featured the IHS Markit PMI’s for October for France and Germany were mixed, but investors’ main focus was the German figures. The German PMI Manufacturing PMI rose to 58.2 versus a 56.5, foreseen, contrary to the Services PMI, which increased to 52.4 lower than the 55 estimated. The Markit PMI Composite, which considers both of the readings, was at 52, lower than the 54 expected.

Across the pond, the US economic docket unveiled the  IHS Markit PMI for Manufacturing and Services for October, offering mixed figures. The Market Manufacturing PMI increased to 59.2, worse than the 60.3 estimated. Regarding the Markit Services PMI, it rose to 58.2 higher than the 55.1 foreseen.

EUR/USD Price Forecast: Technical outlook

The EUR/USD 1-hour chart depicts that the shared currency remains under intense selling pressure. The high of the day around 1.1655 was severely rejected towards 1.1625, breaking a rising upward slope trendline. At press time, the pair trades beneath the abovementioned and below the 50 and the 100-hour simple moving averages (H-SMA’s), confirming the selling pressure. 

Nevertheless, the pair found support at the Thursday low around 1.1619, but a break below would open the door for a test of the 1.1600 figure.

EUR/USD KEY TECHNICAL LEVELS TO WATCH

Overview
Today last price1.1627
Today Daily Change0.0004
Today Daily Change %0.03
Today daily open1.1623
 
Trends
Daily SMA201.1608
Daily SMA501.171
Daily SMA1001.1801
Daily SMA2001.1921
 
Levels
Previous Daily High1.1667
Previous Daily Low1.162
Previous Weekly High1.1624
Previous Weekly Low1.1524
Previous Monthly High1.1909
Previous Monthly Low1.1563
Daily Fibonacci 38.2%1.1638
Daily Fibonacci 61.8%1.1649
Daily Pivot Point S11.1606
Daily Pivot Point S21.1589
Daily Pivot Point S31.1559
Daily Pivot Point R11.1654
Daily Pivot Point R21.1684
Daily Pivot Point R31.1701

Author

Christian Borjon Valencia

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

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