- EUR/USD has rebounded from the one-month lows reached this Tuesday.
- Risk appetite and falling US bond yields weigh on the dollar and offer some support for the pair.
- Expectations of an aggressive Fed rate hike should act as a tailwind for the dollar and limit the pair’s gains.
The pair EUR/USD showed some resistance below the 1.0400 level and staged a good rebound from the low of almost a month that it reached this Tuesday. The pair continued its intraday rise during the first hour of the European session and reached a new daily high around 1.0450 in the last hour.
The change in trend in global risk sentiment, reflected in a positive tone in equity markets, prevented investors from opening new bullish positions around the safe-haven dollar. In addition, the Pullback in US Treasury yields weakened the USDwhich in turn was seen as a key factor helping the EUR/USD pair attract some buying.
At the moment, the pair has broken a three-day losing streak, although more gains seem unlikely. Market participants appear to be convinced that the Federal Reserve will tighten its monetary policy at a faster pace to combat rising inflation, which reached a four-decade high in May. This should act as a tailwind for US bond yields and the dollar, which should cap the EUR/USD pair.
Thus, it is prudent to wait for strong continuation buying before confirming that the recent drop from the post-ECB high around the 1.0775 area is over. Investors are now awaiting the release of the German ZEW index and the US PPI Producer Price Index, to be released later in the American session.
However, attention will remain focused on the outcome of the FOMC’s two-day monetary policy meeting, due to be announced on Wednesday. Markets have been pricing in the possibility of at least one big rally at the September meeting. Therefore, a 75 basis point rise would cause a jolt across asset classes, which should lift the dollar and put downward pressure on the EUR/USD pair.
EUR/USD technical levels
EUR/USD
Panorama | |
---|---|
Last Price Today | 1.0466 |
Today’s Daily Change | 0.0057 |
Today’s Daily Change % | 0.55 |
Today’s Daily Opening | 1.0409 |
Trends | |
---|---|
20 Daily SMA | 1.0651 |
50 Daily SMA | 1.0668 |
100 Daily SMA | 1.0917 |
200 Daily SMA | 1.1196 |
levels | |
---|---|
Previous Daily High | 1,052 |
Previous Daily Minimum | 1.04 |
Previous Maximum Weekly | 1.0774 |
Previous Weekly Minimum | 1.0506 |
Monthly Prior Maximum | 1.0787 |
Previous Monthly Minimum | 1,035 |
Daily Fibonacci 38.2% | 1.0446 |
Daily Fibonacci 61.8% | 1.0474 |
Daily Pivot Point S1 | 1.0366 |
Daily Pivot Point S2 | 1.0323 |
Daily Pivot Point S3 | 1.0246 |
Daily Pivot Point R1 | 1.0486 |
Daily Pivot Point R2 | 1.0563 |
Daily Pivot Point R3 | 1.0606 |
Source: Fx Street
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