EUR/USD hovers below 1.0600 ahead of Eurozone CPI data
The EUR/USD pair remained stable around 1.0575 after retreating from the 1.0600 level in early Asian trading on Wednesday. Heightened market risks favored the US dollar, putting pressure on the currency. Meanwhile, the US Dollar Index adjusted to 106.20, and US Treasury bond yields rose significantly. The EUR/USD exchange rate has risen above the 20-day Simple Moving Average (SMA), which still shows a downward slope. The Momentum indicator has surged above 100, signaling a positive momentum for the Euro. However, the overall trend remains bearish.
On the 4-hour chart, the price is well supported and holds above key SMAs, with technical indicators indicating an upward trend. The current resistance level is around 1.0600, and surpassing this level will draw attention to 1.0630. Closing above this level would pave the way for further profits. On the other hand, dropping below 1.0540 would weaken the Euro, potentially pushing it down to 1.0500.
Despite positive US data and higher Treasury yields, the EUR/USD pair rose on Tuesday, reaching a high of 1.0595 before retracing its gains.
ZEW surveys showed positive signs in the Eurozone, with the Eurozone Economic Sentiment Index improving to 2.3 from -8.9 in October, surpassing market expectations. Germany's ZEW also rebounded from -11.4 to -1.1, beating the market consensus of -9. Next week, the European Central Bank (ECB) is set to hold monetary policy meetings and is expected to keep interest rates unchanged for the first time since June 2022.
On Tuesday, optimistic US economic data, including Retail Sales (up 0.7% in September, exceeding the expected 0.3%) and Industrial Production (0.3% versus 0%), briefly boosted the US dollar. However, the EUR/USD rate dropped to 1.0540 but then reversed its upward trend.
Both US and European bond yields have increased sharply. The US 10-year Treasury yield rose to 4.86% from 2.60%, while Germany's equivalent yield increased from 3.40% to 2.88%. Bond markets continue to experience significant fluctuations. If Eurozone yields align with Treasury rates, the impact could be offset, as seen on Tuesday. However, robust US data might limit the EUR/USD pair's upward potential. On Wednesday, Housing Permits, Building Permits, and the Beige Book from the Fed will expire.
On the 4-hour chart, the price is well supported and holds above key SMAs, with technical indicators indicating an upward trend. The current resistance level is around 1.0600, and surpassing this level will draw attention to 1.0630. Closing above this level would pave the way for further profits. On the other hand, dropping below 1.0540 would weaken the Euro, potentially pushing it down to 1.0500.
Despite positive US data and higher Treasury yields, the EUR/USD pair rose on Tuesday, reaching a high of 1.0595 before retracing its gains.
ZEW surveys showed positive signs in the Eurozone, with the Eurozone Economic Sentiment Index improving to 2.3 from -8.9 in October, surpassing market expectations. Germany's ZEW also rebounded from -11.4 to -1.1, beating the market consensus of -9. Next week, the European Central Bank (ECB) is set to hold monetary policy meetings and is expected to keep interest rates unchanged for the first time since June 2022.
On Tuesday, optimistic US economic data, including Retail Sales (up 0.7% in September, exceeding the expected 0.3%) and Industrial Production (0.3% versus 0%), briefly boosted the US dollar. However, the EUR/USD rate dropped to 1.0540 but then reversed its upward trend.
Both US and European bond yields have increased sharply. The US 10-year Treasury yield rose to 4.86% from 2.60%, while Germany's equivalent yield increased from 3.40% to 2.88%. Bond markets continue to experience significant fluctuations. If Eurozone yields align with Treasury rates, the impact could be offset, as seen on Tuesday. However, robust US data might limit the EUR/USD pair's upward potential. On Wednesday, Housing Permits, Building Permits, and the Beige Book from the Fed will expire.
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