EUR/USD: Weakness could accentuate on CNY slide, focus on US GDP

EUR/USD fell to 2.5-month low yesterday, even though the ECB re-affirmed the intention to end asset purchases at year-end.
The CNY slide will likely keep the EUR better bid in Europe.
The outlook for yield differentials supports USD.
An upbeat US Q3 GDP report would only add to the bullish tone around the USD.

Omkar Godbole FXStreet Contributor

The EUR/USD fell to 1.1356 yesterday - the lowest level since Aug. 16 - and was last seen trading at 1.1365.

The European Central Bank (ECB) reaffirmed its commitment to end the asset purchase program in December despite Italy's budget concerns, Brexit impasse, and recent softer data.

Still, the EUR failed to pick up a bid as comments by the newly appointed Fed Vice Chair Clarida signaled that the Fed officials remain unfazed by the recent stock market rout and hence, yield differentials are set to widen further in a USD-positive manner.

Further, the Chinese yuan fell to a fresh 21-month low against the US dollar in Asia, triggering fears of a further escalation of a trade war between the US and China. The combination of weak CNY and the resulting risk aversion could keep the common currency on the back foot in Europe.

Clearly, the path of least resistance is on the downside and a better-than-expected US Q1 GDP reading would only hasten the drop the August low of 1.13.

The data, due today 12:30 GMT, is expected to show that the annualised GDP growth rate slowed to 3.3 percent in the third quarter from the previous quarter's growth rate of 4.2 percent.

A below-forecast GDP reading would be USD-negative, still, the gains in the EUR/USD may be limited as a sharp slowdown in the world's biggest economy may not bode well for the already risk-averse equities.

EUR/USD Technical Levels

Resistance: 1.1422 (former support-turned-resistance), 1.1468 (10-day MA), 1.15 (psychological hurdle)

Support: 1.1315 (200-week MA), 1.13 (August low), 1.1187 (61.8% Fib R of 1.0341/1.2556)

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

AUD/USD bounces back toward 0.6950 on fresh USD supply

AUD/USD bounces back toward 0.6950 in the Asian session on Friday. The US Dollar retreats from 17-month highs as traders take profits off the table ahead of the all-important US Nonfarm Payrolls report. Meanwhile, the Australian Dollar draws support from reviving expectations of a November interest rate hike amid elevated global yields and inflation risks.

USD/JPY struggles near 158.00 as USD retreats ahead of NFP

USD/JPY is struggling for fresh impetus near 158.00, moving away from the top end of its weekly range in the Asian session on Friday, after hotter-than-expected Tokyo CPI and amid a broad US Dollar retreat. Traders reposition themselves ahead of US Nonfarm Payrolls.

Gold fades the earlier optimism; back below $4,200

Gold could not sustain the post-NFP bull run past the $4,200 mark per troy ounce, receding toward the $4,180 region at the end of the week. The precious metal’s inconclusive price action comes amid fresh selling pressure hurting the US Dollar as investors assess the latest NFP data.

Crypto Today: Bitcoin, Ethereum and XRP gains reinforce bullish outlook

Cryptocurrency prices are broadly recovering on Friday, led by Bitcoin moving above $86,000. Ethereum has reaffirmed its bullish outlook, rising above $2,700 while the immediate area at $2,800 caps upside. Meanwhile, Ripple hovers near $1.54.

Week ahead – Fed minutes in the spotlight amid bond market rout

Energy crisis and soaring bond yields to stay in driver’s seat in quiet week. Fed minutes eyed after drop in October rate hike bets. ISM services PMI and Treasury auctions to be watched too. Canadian employment, Japanese wages and ECB minutes also on tap.

The Euro is near a one-year low: Inflation could trigger its rebound, not its fall

EUR/USD has fallen to its lowest level since May 2025. The pair hit 1.1312 on Wednesday and trades well below the January peak of 1.2082. The decline reflects a powerful combination of US Dollar strength, geopolitical uncertainty and renewed concerns about Europe's exposure to higher energy prices.