- EUR/USD grinds lower around July 2020 levels, prints three-day downtrend.
- US Treasury yields struggle to remain, test DXY bulls.
- ECB rejects rate hike chatters via downbeat economic forecasts, Fed hawks remain hopeful.
- US data, inflation expectations and China headlines will be important for fresh impulse.
EUR/USD treads water around 1.1440, after refreshing multi-day low to 1.1436 ahead of Friday’s European session. The major currency pair recently tracks a mild pullback in the US Treasury yields amid sluggish trading day ahead of the US data.
That said, the US 10-year Treasury yields struggle to remain firmer around 1.56%, following the biggest daily jump in seven weeks portrayed on Wednesday and Friday’s off in the US bond markets. The same weigh on the US Dollar Index (DXY) as the greenback gauge refreshes intraday low following the jump to renew the highest levels since July 2020.
Behind the latest market moves are the chatters over China’s Evergrande and trade ties with the US, both of which flash grim signals and favor the market’s rush to the risk-safety of late. On the same line were Fed rate hike talks after the US inflation jumped to a 31-year peak.
Furthermore, the EU Commission’s (EC) downward revision of the economic growth forecast for the next year and expectations that the inflation will ease help the bloc’s central bank to defend the easy money policy and avoid rate lift talks.
Alternatively, hopes that the Asia-Pacific markets will rebound, per the global rating agency Moody’s, join the Chinese policymakers’ hopes of overcoming the Evergrande and energy crisis to weigh on the US Treasury yields and the greenback. It’s worth noting that a lack of updates on the US inflation and Fed speak could also be linked to the latest consolidation in the market sentiment.
Even so, the EUR/USD bears remain hopeful as the US inflation expectations remain steady near a 15-year high. The same line highlights today’s US Michigan Consumer Sentiment for November, expected 72.4 versus 71.7 prior, for fresh impulse.
Read: US Michigan Consumer Sentiment Index Preview: Inflation’s dangerous impact
Technical analysis
A convergence of a five-month-long descending trend line and high marked in June 2020 becomes a tough nut a crack for the EUR/USD sellers around 1.1420-10 zone. On the other hand, corrective pullback remains less lucrative until the quote stay below one-month-old horizontal resistance, previous support around 1.1530.
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 extends gains above 1.0700, focus on key US data
EUR/USD meets fresh demand and rises toward 1.0750 in the European session on Thursday. Renewed US Dollar weakness offsets the risk-off market environment, supporting the pair ahead of the key US GDP and PCE inflation data.
GBP/USD extends recovery above 1.2500, awaits US GDP data
GBP/USD is catching a fresh bid wave, rising above 1.2500 in European trading on Thursday. The US Dollar resumes its corrective downside, as traders resort to repositioning ahead of the high-impact US advance GDP data for the first quarter.
Gold price edges higher amid weaker USD and softer risk tone, focus remains on US GDP
Gold price (XAU/USD) attracts some dip-buying in the vicinity of the $2,300 mark on Thursday and for now, seems to have snapped a three-day losing streak, though the upside potential seems limited.
Injective price weakness persists despite over 5.9 million INJ tokens burned
Injective price is trading with a bearish bias, stuck in the lower section of the market range. The bearish outlook abounds despite the network's deflationary efforts to pump the price.
US Q1 GDP Preview: Economic growth set to remain firm in, albeit easing from Q4
The United States Gross Domestic Product (GDP) is seen expanding at an annualized rate of 2.5% in Q1. The current resilience of the US economy bolsters the case for a soft landing.