- The EUR/USD is drooping into new six-month lows for Tuesday.
- The Euro initially rallied to a session high of 1.0610 before running out of steam, heading back into the day's lows.
- Markets will be looking ahead to US GDP figures on Thursday.
The Euro (EUR) caught a small lift against the Greenback (USD) in early Tuesday trading before reversing direction and heading back into bearish territory and is now probing into the EUR/USD pair's lowest prices in half a year.
The broad US Dollar Index (DXY) is seeing a healthy bid across the markets, bolstered by a jump in US Treasury yields.
German 10-year Bund yields are also receding from 12-year highs above 2.80%, exacerbating the Euro's backslide.
Adding to the EUR's woes is a rate cycle logjam within the European Central Bank (ECB). Voting members of the ECB have reached a consensus that it's best to avoid any further rate hikes as the central bank waits for evidence that current rates are having the desired effect.
Inflation still remains above target for the European Union's domestic economy, but policymakers fear leaning on rates too fast and choking out what little economic growth currently exists. Markets are broadly anticipating a continued slowdown in the EU's economy, with jobs growth evaporating and economic activity remaining sluggish.
US data in the pipe, Friday to see EU CPI & US PCE
The US Housing Price Index for July came in above expectations, printing 0.8% to vault over the forecast 0.5% and doubling the previous reading of 0.4%.
Wednesday will see US Durable Goods Orders for August, which is forecast to print at -0.5%, a rebound from the previous reading of -5.2%.
Thursday will bring the ECB's latest Economic Bulletin, while the Federal Reserve's (Fed) Chair Jerome Powell will be making a public statement at 20:00 GMT.
Before Powel though, US Gross Domestic Product (GDP) for the second quarter will be dropping, and the headline annualized reading is forecast to hold steady at 2.1%.
Investors will be watching closely for Friday's double feature, where the EU's Consumer Price Index (CPI) and the US' Personal Consumption Expenditure (PCE) Price Index data publishes.
EU CPI is expected to decline to 4.8% from 5.3% for the annualized period into September.
US PCE inflation for the month of August is forecast to hold steady at the previous figure of 0.2%.
EUR/USD technical outlook
The EUR/USD saw a clean rejection of the 34-hour Exponential Moving Average (EMA) early Tuesday near 1.0605, and the pair is now testing into new six-month lows on the south side of 1.0570.
On the daily candlesticks, the EUR/USD is notably bearish, continuing to fall from the 200-day Simple Moving Average (SMA) currently turning bearish just below 1.0850, with dynamic resistance from a descending trendline from July's swing high above 1.1250.
Technical indicators are fully pinned into oversold territory, but bidders will want to wait for a confirmed recovery pattern before attempting to catch this particular falling knife.
EUR/USD daily chart
EUR/USD technical levels
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 struggles to gain traction, trades near 1.0800
EUR/USD finds it difficult to gather recovery momentum and trades near 1.0800 on Tuesday as the US Dollar benefits from the risk-averse market atmosphere. ECB President Lagarde's cautious remarks about inflation outlook helps the pair limit its losses.
GBP/USD extends slide after failing to reclaim 1.3000
GBP/USD loses its traction and trades in negative territory after failing to stabilize above 1.3000 earlier in the day. The souring market mood doesn't allow the pair to stage a decisive rebound as the market focus remains on geopolitics and central bank speak.
Gold continues uptrend toward $2,750 as Middle East conflict rages on
Gold continues its uptrend and trades near the record-high it set at $2,740 as the conflict in the Middle East remains unabated, while markets assess the changing outlook for global interest rates. Technically, XAU/USD trends higher as a multi-time-frame uptrend extends.
Bitcoin dips below $67,000 as holders book profits
Bitcoin continues to trade in the red on Tuesday after facing rejection around the $70,000 level on Monday. Despite the price decline, institutional investors capitalized on the recent dips, with the US spot Exchange Traded Funds recording over $297 million in inflows.
Trump vs Harris – What it means for US-China relations
Democrats and Republicans agree on few things, but that China is the primary foreign policy threat is one of them. Both sides believe China has a long term goal of supplanting the US as the leading power in the world but while they agree on the threat, they differ on how to deal with it.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.