EUR/USD sticks to modest recovery gains around 1.0775-80 area amid weaker USD

  • 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


Today last price 1.0778
Today Daily Change 0.0016
Today Daily Change % 0.15
Today daily open 1.0762
Daily SMA20 1.086
Daily SMA50 1.0696
Daily SMA100 1.0771
Daily SMA200 1.0821
Previous Daily High 1.0805
Previous Daily Low 1.0759
Previous Weekly High 1.1017
Previous Weekly Low 1.0829
Previous Monthly High 1.1017
Previous Monthly Low 1.0517
Daily Fibonacci 38.2% 1.0776
Daily Fibonacci 61.8% 1.0787
Daily Pivot Point S1 1.0746
Daily Pivot Point S2 1.0729
Daily Pivot Point S3 1.07
Daily Pivot Point R1 1.0792
Daily Pivot Point R2 1.0821
Daily Pivot Point R3 1.0838



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