EUR/USD leaves behind daily lows near 0.9970

- Advertisement -
  • EUR/USD bounces away from lows initially hit in the 0.9970 area.
  • The dollar gives back part of the recent advance beyond 109.00.
  • EMU inflation figures surprised to the upside in August.

After a push towards the 0.9970 area, the EUR/USD managed to gain traction and regain parity on Wednesday.

EUR/USD finds support around 0.9970

- Advertisement -

EUR/USD now appears to be adding to the positive start to the week, though for now it remains at the mercy of inconclusive trends in risk appetite.

Meanwhile, higher-than-expected eurozone inflation figures for the current month seem to have given more conviction to investors’ perception of a 75 basis point rate hike at the ECB meeting in September. , which seems to have given the single currency some wings.

- Advertisement -

On the US docket, the revised ADP report showed that the US private sector added 132,000 jobs in August, less than initially estimated.

What to watch out for around the EUR

EUR/USD is now moving amid renewed USD buying as well as worsening conditions in the risk space.

So far, price action around the European currency is expected to closely follow dollar dynamics, geopolitical concerns, fragmentation fears and the divergence between the Fed and the ECB. However, possible shifts towards a more aggressive stance by ECB policy makers on the bank’s rate path could be a source of strength for the euro.

Among the negative aspects for the single currency is the growing speculation about a possible recession in the region, which seems to be underpinned by the decline in sentiment indicators and the incipient slowdown in some fundamental indicators.

Technical levels

For now, the pair is down 0.11% at 1.0001 and a break of 0.9899 (2022 low Aug 23) would target 0.9859 (Dec 2002 low) on the way to 0.9685 (Oct 2022 low). On the other hand, the next upside barrier is found at 1.0090 (26 Aug weekly high), followed by 1.0202 (17 Aug high) and finally 1.0223 (55-day SMA).

Source: Fx Street

- Advertisement -


Please enter your comment!
Please enter your name here

Hot Topics

Related Articles