EUR/USD risks a correction lower in the very near-term – UOB

Pablo Piovano FXStreet

EUR/USD faces a potential leg lower although solid support emerges at 1.2200, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “We expected EUR to ‘consolidate within a 1.2200/1.2280 range’ yesterday. However, it rose to a high of 1.2309 before retreating quickly. The underlying tone has softened and this could lead to EUR edging lower. That said, any decline is unlikely to break the support at 1.2200 (minor support is at 1.2225). Resistance is at 1.2280 followed by the high at 1.2309. The latter level is unlikely to come into the picture for today.”

Next 1-3 weeks: “EUR eked out a fresh high of 1.2309 last Thursday before dropping sharply. Further EUR strength is not ruled out but upward momentum appears to be struggling and the risk of a top has increased. Unless EUR surges above 1.2309 and stays above this level within these few days, the odds for further EUR strength would diminish quickly (next resistance is at 1.2330). On the downside, a break of 1.2170 (‘strong support’ level) would indicate that EUR could consolidate and trade sideways for a period of time.”

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.

EUR/USD meets initial support around 1.1800

EUR/USD remains on the back foot, although it has managed to reverse the initial strong pullback toward the 1.1800 region and regain some balance, hovering around the 1.1850 zone as the NA session draws to a close on Tuesday. Moving forward, market participants will now shift their attention to the release of the FOMC Minutes and US hard data on Wednesday.

GBP/USD bounces off lows, retargets 1.3550

After bottoming out just below the 1.3500 yardstick, GBP/USD now gathers some fresh bids and advances to the 1.3530-1.3540 band in the latter part of Tuesday’s session. Cable’s recovery comes as the Greenback surrenders part of its advance, although it keeps the bullish bias well in place for the day.

Gold bounces back toward $4,900, looks to FOMC Minutes

Gold is attempting a bounce from the $4,850 level, having touched a one-week low on Tuesday. Signs of progress in US–Iran talks dented demand for the traditional safe-haven bullion, weighing on Gold in early trades. However, rising bets for more Fed rate cuts keep the US Dollar bulls on the defensive and act as a tailwind for the non-yielding yellow metal. Traders now seem reluctant ahead of the FOMC Minutes, which would offer cues about the Fed's rate-cut path and provide some meaningful impetus.

DeFi could lift crypto market from current bear phase: Bitwise

Bitwise Chief Investment Officer Matt Hougan hinted that the decentralized finance sector could lead the crypto market out of the current bear phase, citing Aave Labs’ latest community proposal as a potential signal of good things to come.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.

Ripple slides to $1.45 as downside risks surge

Ripple edges lower at the time of writing on Tuesday, from the daily open of $1.48, as headwinds persist across the crypto market. A short-term support is emerging at $1.45, but a buildup of bearish positions could further weaken the derivatives market and prolong the correction.