- Risk-on market sentiment fails to underpin the greenback.
- EUR/USD recovers from last week's losses, trades above 1.1600.
- Eurozone Sentix Investor Confidence dropped for the third consecutive month.
- From a technical perspective, the bearish bias is intact.
The EUR/USD is advancing in the session, trading at 1.1619 up 0.20% during the day at the time of writing. As the New York session progresses, the market sentiment is downbeat, spurred by Evergrande's default to a US dollar bond-denominated with no grace period that halted transactions of their shares in the stock market. Further, inflationary pressures propel by an ongoing energy crisis are the drivers of the day.
Major US stock indices are slumping severely, between 1.26% and 2.51%, being the most affected, technologic shares. In the meantime, the US Dollar Index (DXY), which measures the greenback's performance against a basket of six peers, is down 0.30%, sitting at 93.75.
Eurozone investor confidence dropped for the third month in a row
In the macroeconomic overview, investor confidence dropped severely in October, according to Sentix. The Eurozone Sentix Investor Confidence fell for the third consecutive month, from 19.6 to 16.9, well beneath the foreseen of 19. The report explained that signs of the global economy point to a mid-cycle slowdown, underpinned by the US.
Across the pond, the US Census Bureau revealed that the Factory Orders for August rose by 1.2%, more than 0.9% foreseen by analysts.
The market reaction to both reports was muted, as market sentiment is the main driver for the day.
EUR/USD Price Forecast: Technical outlook
The EUR/USD recent uptick printed a daily high at 1.1638, a heavy-confluence zone in the 4-hour chart. The 61.8% Fibo retracement of the 1.1689 – 1.1562 swing high/low and the R2 pivot point around 1.1630s level exerted downward pressure on the pair, spurring a retracement towards the current levels.
If the buyers want to regain control, they need a break above the 200-simple moving average (SMA) at 1.1664. a breach of that level would expose 1.1700.
On the other hand, if EUR/USD sellers want to resume the downtrend, a break below 1.1600 could pave the way for further losses. The first demand zone would be the 50-simple moving average at 1.1594, followed by the confluence of 2021 low and the S1 pivot level at 1.1667.
The Relative Strength Index is at 49, aiming lower, suggesting that the price could be subject to downward pressure, despite the EUR/USD upside bias triggered by a weaker US dollar.
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 clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.