EUR/USD Steady Amid Dollar Weakness
EUR/USD maintains a higher level but remains below 1.0600 in Wednesday's Asian trading. Risk sentiment prevails, weighing on the US Dollar, especially amid positive data from China. Market focus is on Lagarde's speech and EU/US data. The EUR/USD rate has risen above the 20-day Simple Moving Average (SMA), which still slopes downward. The Momentum indicator is above 100, signaling positivity for the Euro, though the overall trend remains bearish.
On the 4-hour chart, the price is well-supported and above key SMAs, with technical indicators indicating an uptrend. The current resistance level is around 1.0600, and a breach could draw attention to 1.0630. Closing above this level daily would pave the way for further gains. Conversely, dropping below 1.0540 could weaken the Euro, pushing it towards 1.0500. EUR/USD rose on Tuesday, defying positive US data and higher Treasury yields. The pair reached a high of 1.0595 before retracing.
ZEW's survey shows positive signs in the region, with the Eurozone's economic sentiment index improving to 2.3 from -8.9 in October, beating market expectations. Germany's ZEW also recovered from -11.4 to -1.1, surpassing the market's consensus of -9. Next week, the European Central Bank (ECB) is set to hold its monetary policy meeting, expected to keep rates unchanged for the first time since June 2022.
On Tuesday, optimistic US economic data included Retail Sales (up 0.7% in September, compared to the expected 0.3%) and Industrial Production (0.3% vs. 0%). The US Dollar briefly gained from this data but quickly lost momentum. EUR/USD dropped to 1.0540 but then reversed its uptrend.
Both US and European bond yields surged, with the US 10-year yield rising to 4.86% from 2.60%, and Germany's equivalent yield increased from 3.40% to 2.88%. Bond markets continued to experience significant fluctuations. If Eurozone rates follow Treasury yields, the impact might be offset, as seen on Tuesday. However, robust US data could limit EUR/USD's upward potential. On Wednesday, Housing Permits, Building Permits, and the Beige Book by the Fed are due. Stay tuned for updates on this dynamic market scenario.
On the 4-hour chart, the price is well-supported and above key SMAs, with technical indicators indicating an uptrend. The current resistance level is around 1.0600, and a breach could draw attention to 1.0630. Closing above this level daily would pave the way for further gains. Conversely, dropping below 1.0540 could weaken the Euro, pushing it towards 1.0500. EUR/USD rose on Tuesday, defying positive US data and higher Treasury yields. The pair reached a high of 1.0595 before retracing.
ZEW's survey shows positive signs in the region, with the Eurozone's economic sentiment index improving to 2.3 from -8.9 in October, beating market expectations. Germany's ZEW also recovered from -11.4 to -1.1, surpassing the market's consensus of -9. Next week, the European Central Bank (ECB) is set to hold its monetary policy meeting, expected to keep rates unchanged for the first time since June 2022.
On Tuesday, optimistic US economic data included Retail Sales (up 0.7% in September, compared to the expected 0.3%) and Industrial Production (0.3% vs. 0%). The US Dollar briefly gained from this data but quickly lost momentum. EUR/USD dropped to 1.0540 but then reversed its uptrend.
Both US and European bond yields surged, with the US 10-year yield rising to 4.86% from 2.60%, and Germany's equivalent yield increased from 3.40% to 2.88%. Bond markets continued to experience significant fluctuations. If Eurozone rates follow Treasury yields, the impact might be offset, as seen on Tuesday. However, robust US data could limit EUR/USD's upward potential. On Wednesday, Housing Permits, Building Permits, and the Beige Book by the Fed are due. Stay tuned for updates on this dynamic market scenario.
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