EUR/USD's reversal from 1.1665 extends to 1.1620 session lows


  • The euro dips further end hits session lows near 1.1600.
  • The USD firms up on inflation fears.
  • EUR/USD is expected to return below 1.1600 – Scotiabank.

The euro has extended its reversal from week-highs at 1.1665 to hit fresh session lows at 1.1600 during Thursday's late US session. The pair is giving away gains, after a three-day rally, weighed by higher demand for USD amid a sourer market sentiment.

The US dollar picks up on inflation concerns

The common currency has been trading on a soft tone as the risk rally witnessed on previous days faded. Quarterly earnings have failed to lift spirits and concerns about the surging inflation and supply chain disruptions have returned to the spotlight, boosting demand for safe assets against riskier currencies like the euro.

Furthermore, US T-Bond yields have resumed their rally, with the US benchmark 10-year note hitting 4-month highs at 1.68%. The market is assuming that the persistently high inflation will force the Federal Reserve to accelerate its monetary policy normalization plan, which has provided additional support to the greenback.

On the macroeconomic front, US data has been mixed. Weekly jobless claims have dropped to their lowest levels in 19 months and existing home sales increased 7.0% to 6.29 million in September, the highest reading since January. On the other hand, The Philadelphia Fed Manufacturing survey dropped to 23.8 from 30.7 in the previous month.

EUR/USD: Seen returning below 1.1600 – Scotiabank

The FX Analysis team at Scotiabank, e3xpects the pair to decline further on Friday, to end the week below 1.1600: “Friday’s release of preliminary PMIs in the eurozone that will likely reflect the impact of high energy prices in the region. However, with the hit to manufacturing generally expected, only a large data miss could see the EUR/USD fall under the key 1.16 level. (…) The intraday low of ~1.1635 is support followed by 1.1600/15. Resistance is 1.1665/85.”

Technical levels to watch

EUR/USD

Overview
Today last price 1.1624
Today Daily Change -0.0027
Today Daily Change % -0.23
Today daily open 1.1651
 
Trends
Daily SMA20 1.1614
Daily SMA50 1.1713
Daily SMA100 1.1806
Daily SMA200 1.1923
 
Levels
Previous Daily High 1.1659
Previous Daily Low 1.1617
Previous Weekly High 1.1624
Previous Weekly Low 1.1524
Previous Monthly High 1.1909
Previous Monthly Low 1.1563
Daily Fibonacci 38.2% 1.1643
Daily Fibonacci 61.8% 1.1633
Daily Pivot Point S1 1.1626
Daily Pivot Point S2 1.1601
Daily Pivot Point S3 1.1584
Daily Pivot Point R1 1.1668
Daily Pivot Point R2 1.1684
Daily Pivot Point R3 1.1709

 

 

 

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