- EUR/USD manages to return above 0.9750 after crashing to a new low.
- The dollar remains firm and advances in the market.
- Risk aversion and rising yields fuel the greenback.
- Data: Preliminary European PMI for September disappoints.
The EUR/USD broke below 0.9800 and tumbled to 0.9735, reaching levels not seen since October 2002. In the last hour the pair rebounded and rose towards 0.9770. Despite cutting losses, downward pressures continue. The improvement from the low was associated with a significant rise in EUR/GBP, which surpassed 0.8800 the maximum since January 2021.
The 0.9750 zone has turned into immediate support followed by the recent low. Below the next supports are seen at 0.9700, and 0.9680. In the opposite direction, the first major resistance can be seen at 0.9810 followed by 0.9875.
Stronger Dollar Picture Materializes
In line with most forecasts in recent weeks, the dollar remains strong and extended the advance across the market to new highs in years and decades. The DXY it is above 112.00, maximum in 20 years.
The pessimism in the equity markets in combination with treasury bond yields higher are being a powerful fuel for the dollar rally. Yields are at their highest in decades, while in Europe stocks are down more than 1.5% on average.
The negative climate was accentuated after the publication of economic data from Europe with the preliminary PMIs for September, which were mostly below expectations. Germany’s composite index went from 46.9 to 45.9, and the Eurozone’s from 48.9 to 48.2. US PMI will be released later on Friday.
Technical levels
Source: Fx Street
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