EUR/USD slips below 1.1400 mark amid notable USD strength, downside seems limited

EUR/USD meets with a fresh supply on Tuesday amid the emergence of some USD buying.
US fiscal concerns and Fed rate cut bets should cap the USD gains, and support the major.
The ECB's relatively hawkish outlook could support the EUR and warrants caution for bulls.

Haresh Menghani FXStreet

The EUR/USD pair struggles to capitalize on the previous day's move higher and attracts fresh sellers near the 1.1435 region during the Asian session on Tuesday. The intraday slide is sponsored by a goodish pickup in the US Dollar (USD) demand and drags spot prices back below the 1.1400 round figure in the last hour.

Friday's stronger-than-expected US Nonfarm Payrolls (NFP) report dampened hopes for imminent Federal Reserve (Fed) interest rate cuts this year. This, along with the optimism over the resumption of US-China trade talks, prompts traders to lighten their USD bearish bets, which, turns out to be a key factor exerting pressure on the EUR/USD pair. However, with negotiations extending to a second day in London, traders might refrain from placing aggressive directional bets.

Furthermore, traders are still pricing in a greater chance that the US central bank will lower borrowing costs in September. This, along with concerns about the US government's financial health, might cap further USD appreciation and act as a tailwind for the EUR/USD pair. In contrast, the European Central Bank (ECB) hinted at the end of rate cuts during a meeting held last week. This could further benefit the shared currency and contribute to limiting losses for the currency pair.

Traders might also refrain from placing aggressive bets ahead of the release of US inflation figures this week. Hence, it will be prudent to wait for some follow-through selling before positioning for an extension of the recent pullback from the vicinity of the 1.1500 psychological mark, or the highest level since April 22 touched last week. In the absence of any relevant macro releases, either from the Eurozone or the US, the EUR/USD pair remains at the mercy of the USD price dynamics.

US Dollar PRICE Today

The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Japanese Yen.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.22%	0.10%	0.25%	0.04%	-0.02%	0.14%	0.14%
EUR	-0.22%		-0.10%	0.02%	-0.14%	-0.21%	-0.07%	-0.05%
GBP	-0.10%	0.10%		0.04%	-0.04%	-0.11%	0.04%	0.06%
JPY	-0.25%	-0.02%	-0.04%		-0.17%	-0.29%	-0.17%	-0.18%
CAD	-0.04%	0.14%	0.04%	0.17%		-0.08%	0.08%	0.10%
AUD	0.02%	0.21%	0.11%	0.29%	0.08%		0.17%	0.17%
NZD	-0.14%	0.07%	-0.04%	0.17%	-0.08%	-0.17%		0.02%
CHF	-0.14%	0.05%	-0.06%	0.18%	-0.10%	-0.17%	-0.02%

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 US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

AUD/USD flatlines near 0.6965 as less hawkish RBA counters USD weakness

AUD/USD holds steady above a two-week low, trading near 0.6965 in the Asian session on Wednesday as early midterm election results heighten political uncertainty and weigh heavily on the US Dollar. Moreover, reviving safe-haven demand triggers a fresh leg down in US bond yields, offsetting Fed hike bets and exerting additional pressure on the buck. However, a less hawkish RBA caps the Aussie.

USD/JPY declines below 158.00 as USD weakens on midterm election results

USD/JPY comes under heavy selling pressure on Wednesday, dropping below 158.00 during the Asian session as the US Dollar slumps to a one-month low amid heightened political uncertainty after early US midterm vote counts. Moreover, the prospect of gridlock in Washington drives safe-haven flows, triggering a fresh leg down in US bond yields and further weighing on the buck.

Gold clings to gains near weekly top, comfortably above $4,000 as US elections hit USD

Gold clings to strong intraday gains near the weekly high, trading comfortably above the $4,000 psychological mark during early European session amid a broadly weaker US Dollar. Democrats’ wins in the House and Senate raise the prospect of gridlock in Washington. Moreover, heightened political uncertainty drove investors to safe-haven assets, exerting downward pressure on US bond yields. This is seen weighing on the Greenback and supporting the precious metal.

Bitcoin tests critical support, Ethereum struggles below resistance, XRP extends losses

Bitcoin (BTC), Ethereum (ETH) and Ripple (XRP) remain under pressure on Wednesday as bearish momentum continues to weigh on prices. BTC approaches key support around $76,466, and a decisive close below could open the door to deeper losses. Meanwhile, ETH struggles below key resistance while XRP faces rejection at the upper trendline of a falling channel pattern, all hinting at deeper losses.

US Dollar Index dives to late September lows near 101.25 on US election results

The US Dollar Index, which tracks the Greenback against a basket of currencies, comes under intense selling pressure during the Asian session on Wednesday, dropping to its lowest level since late September as early US midterm election results heightened political uncertainty.

The 2% inflation target came from a throwaway remark. It now moves trillions

The Federal Reserve's 2% inflation goal grew out of an off-the-cuff remark by a New Zealand politician in 1988. Bond investors still price long-term US debt as if 2% holds, so a change in how the Fed measures inflation would move markets.