EUR/USD tumbles below 1.0950 as Middle East tensions escalate, US PPI eyed

EUR/USD falls sharply below 1.0950 on deepening geopolitical tensions.
Fears of widening conflicts in Middle East region have improved the safe-haven appeal.
The ECB is not required to raise interest rates further.

Sagar Dua FXStreet

The EUR/USD pair has slipped below the crucial support of 1.0950 as the market mood has turned risk-averse amid deepening Middle East tensions. The major currency pair has been hit hard as demand for safe-haven assets has improved significantly.

S&P500 futures are facing significant losses in the late European session, indicating a sharp decline in the risk-appetite of the market participants. Fears of widening conflicts in the Middle East region after US airstrikes on Iran-backed Houthi rebels in retaliation for striking on commercial oil shipments from Red Sea has dampened the market sentiment.

The US Dollar Index (DXY) has rebounded sharply above 102.50, supported by stubbornly higher United States inflation and geopolitical tensions. The US headline inflation accelerated sharply in December amid elevating rental prices and healthcare costs. While bets supporting a rate cut by the Federal Reserve (Fed) in March are still firm.

As per the CME Fedwatch tool, chances in favour of a rate cut by 25 basis points (bps) in March are slightly above 68%.

Meanwhile, investors await the US Producer Price Index (PPI) data for December, which will be published at 13:30 GMT. The annual headline PPI is forecasted to grow strongly by 1.3% against 0.9% gain in November. In the same period, core PPI that excludes volatile food and oil prices is seen decelerating to 1.9% against 2.0%.

On the Eurozone front, European Central Bank (ECB) President Christine Lagarde has confirmed that the central bank is done with hiking interest rates. She added that worst about inflation is behind us but rate cuts would come if the central bank gets certain about inflation declining towards 2%. While asked about economic shrinkage, Lagarde said the Euro zone is not in an official recession.

EUR/USD

Overview
Today last price	1.0947
Today Daily Change	-0.0025
Today Daily Change %	-0.23
Today daily open	1.0972

Trends
Daily SMA20	1.0981
Daily SMA50	1.0893
Daily SMA100	1.0766
Daily SMA200	1.0848

Levels
Previous Daily High	1.1004
Previous Daily Low	1.093
Previous Weekly High	1.1046
Previous Weekly Low	1.0877
Previous Monthly High	1.114
Previous Monthly Low	1.0724
Daily Fibonacci 38.2%	1.0976
Daily Fibonacci 61.8%	1.0958
Daily Pivot Point S1	1.0933
Daily Pivot Point S2	1.0895
Daily Pivot Point S3	1.086
Daily Pivot Point R1	1.1007
Daily Pivot Point R2	1.1042
Daily Pivot Point R3	1.108

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

GBP/USD advaces beyond 1.3450 after BoE decision, US Q2 GDP

GBP/USD gains positive momentum on Thursday, surpassing 1.3450 and trading at fresh multi-week highs. The Bank of England decided to maintain the benchmark rate unchanged at 3.75%. The MPC voted 6-3 to keep rates on hold, with the 3 dissenters favoring a rate hike. US Q2 GDP missing expectations helped the pair advance, while renewed US Dollar weakness across the FX board pushed the pair further up ahead of the monthly close.

EUR/USD confortable around 1.1530, highest in six weeks

The EUR/USD pair trades around 1.1530 in the American session on Thursday, reaching fresh six-week highs. The US Dollar is in sell-off mode, with multiple factors weighing on the American currency. Not only did the Federal Reserve vote divided to keep rates on hold on Wednesday, creating doubts about a September hike, but US Q2 GDP missed expectations. A suspected JPY intervention adds pressure on the Greenback.

Gold recovers the $4,100 level as US Dollar weakens further

Gold trades just above $4,100 amid a US Dollar sell-off. The Greenback enjoyed some near-term demand following Wednesday's post-FOMC downfall, but was unable to retain its gains. The preliminary estimate of the US Q2 GDP showed the economy grew at an annual rate of 1.5%, missing the market's expectations of 2.1%.

Bank of Japan set to keep interest rates unchanged after suspected Yen intervention

Investors are turning their attention to the Bank of Japan’s monetary policy announcement on Friday, after the Japanese Yen staged a dramatic rebound during Thursday's American session. The move came amid growing speculation that Japanese authorities intervened in the foreign exchange market after USD/JPY tumbled from above 163.00 to below 158.00 within minutes.

Aave to sunset Sonic, Aptos, zkSync, Scroll reserves, affecting $98 million in supply

Aave is planning to sunset 75 low-activity reserves across its decentralized finance protocol as part of a broader effort to reduce operational, technical and economic risks across its network of deployments.

9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?

The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.