- EUR/USD states a modest recovery from a multi-week low touched earlier this Thursday.
- Fed rate cut bets and a strong pickup in the JPY demand prompt some USD profit-taking.
- A softer risk tone should limit the USD losses and cap the pair amid dovish ECB rhetorics.
The EUR/USD pair attracts some buyers in the vicinity of mid-1.0700s, or its lowest level since November 14 touched earlier this Thursday and for now, seems to have snapped a six-day losing streak. Spot prices stick to modest intraday gains around the 1.0775-1.0780 region through the early European session amid a weaker US Dollar (USD), though lack bullish conviction.
The USD pullback from a two-week high touched on Wednesday could be attributed to some profit-taking on the back of dovish Federal Reserve (Fed) expectations. Apart from this, a strong pickup in demand for the Japanese Yen (JPY) turns out to be another factor weighing on the Greenback. That said, a generally weaker tone around the equity markets should help limit losses for the safe-haven buck and cap any meaningful appreciating move for the EUR/USD pair.
Furthermore, the recent dovish rhetorics from European Central Bank (ECB) officials might hold back traders from placing fresh bullish bets around the shared currency. ECB board member Isabel Schnabel said on Tuesday that the central bank can take further rate hikes off the table given a remarkable fall in inflation and lifted rate cut bets. In fact, the markets are now pricing in the possibility of a 142 bps cumulative rate cut in 2024, which should cap the EUR/USD pair.
On the economic data front, industrial output in German – the Eurozone’s economic powerhouse – declined by 0.4% in October as against estiates for a 0.2% fall and -1.3% seen in the previous month. Market participants now look to the release of the Weekly Initial Jobless Claims data from the US for some impetus later during the early North American session, though the focus will remain glued to the NFP report on Friday. Meanwhile, the aforementioned mixed fundamental backdrop makes it prudent to wait for strong follow-through buying before confirming that the recent sharp pullback from the 1.1015 area, or over a three-month high touched in November has run its course.
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD bounces off lows, back near 1.1330
EUR/USD meets daily support around the 1.1300 neighbourhood, managing to regain pace and revisit the 1.1330 region. Sentiment turned after President Trump proposed a “straight 50% tariff” on European imports, undermining the pair’s bullish momentum.
GBP/USD eases from tops, revisits the 1.3500 zone
GBP/USD benefits from broad US Dollar weakness, climbing to its highest level since February 2022 past 1.3500 at the end of the week. UK retail sales data surprised to the upside in April, lending extra wings to the quid.
Gold keeps the bullish tone near $3,350
Gold extends its weekly advance, trading around $3,350 per troy ounce on Friday. The rally in XAU/USD is driven by broad-based weakness in the Greenback, particulalry after President Trump’s threat to impose 50% tariffs on European imports.
Apple stock sinks below $200 after Trump threatens more tariffs Premium
Trump grows irate at Apple's move into India. President claims Apple must produce US-sold iPhone in US or face a 25% tariff. US equity futures slip more than 1% in Friday premarket after Trump threatens the EU with a 50% tariff.
Ripple Price Prediction: Whale accumulation sparks hope as rising exchange reserves signal caution
XRP sustains mid-week recovery as XRP/BTC flashes golden cross for the first time since 2017. Large volume holders increase XRP exposure, indicating rising demand and investor confidence.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.