- The EUR/USD pair retreats from the day’s highs as risk aversion takes hold on Friday.
- The US Dollar is recovering heading into Friday’s close, bouncing off the day’s lows.
- US PCE was in line with expectations, investors turn their eyes to the Fed’s next rate call.
The EUR/USD pair retreated to the 1.0570 area by midday on Friday, and the Euro was on the verge of recovering the 1.0600 area before the close of the trading week.
The US Dollar (USD) is getting intraday bids to rebound from Friday’s lows, with the US Dollar Index (DXY) recovering to the day’s opening prices.
The US core Personal Consumption Expenditure (PCE) Index was in line with expectations, with the Federal Reserve’s (Fed) preferred method of measuring inflation at 3.7% for the year to September, compared with August print of 3.8%, which was revised down from 3.9%.
Next week: EU GDP, HICP inflation, US Fed rate decision
Following the release of the week’s key data, investors will focus on next week, when the Harmonized Consumer Price Index (HICP) and EU Gross Domestic Product (GDP) will be released on Tuesday. while on Wednesday the US Federal Reserve will announce a new rate hike.
Wall Street expects the European economic situation to continue to deteriorate, with EU GDP expected to decline by just 0.2% in the third quarter, down from 0.5% in the second, while the EU HICP will show a fall in inflation. from 4.3% to 3.4% in October.
Markets have broadly forecast the Fed to leave interest rates unchanged next Wednesday, but traders will be keeping an eye on the Fed’s “dot plot” and Fed Chair Jerome Powell’s scheduled speech for 30 minutes after the publication of the rate declaration.
Despite money market bets on a Fed follow-through, traders remain nervous about a possible rate hike by the Fed at its December meeting as US economic numbers remain too much. good enough for the markets to bet on a rate cut sooner rather than later.
EUR/USD Technical Outlook
The EUR/USD pair has pulled back from Friday’s highs, just below the 1.0600 area, and the pair is set to close the week down 1.2% from Tuesday’s high near 1.0695.
On daily candles, the Euro is having limited success in staging a rebound from the 2023 lows near 1.0450 set in early October, with the highs of a pattern of near-term higher lows colliding with the 50-day moving average (SMA) technical resistance.
EUR/USD Hourly Chart
EUR/USD Daily Chart
EUR/USD technical levels
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
