- EUR/USD extends gains above 0.9900, next barrier at 1.0015.
- The euro gains more than 400 points from last week’s low.
- The dollar falls across the board on risk appetite and lower yields in the US.
EUR/USD rose further during the American session and rose as high as 0.9977, hitting the highest level in a week. It remains near the top, up more than 150 points on the day and 440 above last week’s low.
The next critical level on the upside is the parity zone and the resistance zone at 1.0015. On the other hand, now 0.9900 has become initial support, followed by 0.9850/55.
Dollar weakness boosts EUR/USD
On Tuesday, the JOLTS report (Job Openings report) for August showed the biggest monthly decline on record, going from 11.17 million to 10.05, a possible sign of a slowdown in the labor market. The negative report follows the larger-than-expected drop in the ISM manufacturing index for September, released on Monday. The ADP report will be released on Wednesday and the critical NPF report on Friday.
The latest round of US data below expectations contributed to the EUR/USD rally by weakening the dollar. The combination of lower US yields and rising equity prices continue to weigh on the dollar. DXY is down more than 1%, trading below 110.50. The US 10-year yield stands at 3.61%, close to weekly lows, and a far cry from levels above 4% it hit six days ago. On Wall Street, the Dow Jones rises 2.50% and the Nasdaq 3.15%.
Despite the latest data, the Federal Reserve continues to be seen raising interest rates to curb inflation. The same situation occurs in the central bank. In a speech on Wednesday, Christine Lagarde said it’s hard to tell if inflation is peaking: “The least we have to do is stop stimulating demand,” Lagarde added.
Technical levels
Source: Fx Street
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