- EUR rises from multi-month lows at 1.1530.
- The USD makes up lost ground as inflation fears the market’s bad mood.
- EUR / USD seen declining towards 1.1395 – Commerzbank.
The EUR it is trying to recover from multi-month lows at 1.1530 in the US trading session on Wednesday, although it remains well below previous lows at 1.1560 so far.
USD strengthens, euro sinks into safe-haven flows
The euro suffered Wednesday against a stronger US dollar in a risk-off session. The world’s major stock markets have returned to bearish numbers, with safe assets such as government bonds aided by concerns about mounting inflationary pressures with oil prices hitting new seven-year highs and posing a challenge for the economy. post-COVID-19 recovery.
Higher US yields have supported the dollar, which has been further boosted by macroeconomic data. The US ADP employment report has anticipated a 568,000 increase in US payrolls in September, beating expectations for 428,000 new jobs. These figures, if confirmed on Friday, would add pressure on the Federal Reserve to push for the gradual reduction of QE.
EUR / USD: Pointing towards 1.1395 – Commerzbank
Karen Jones, FICC Technical Analysis Research Team Leader at Commerzbank, sees further downside potential in the pair, with the potential to reach levels below 1.1400: “Intraday rallies will find an accelerated downtrend at 1.1688, but key nearby resistance is 1.1792 3-month downtrend (…) “We note intraday Elliott wave counts have already turned negative, implying another leg to the downside soon enough (…) Next key support to highlight it will be the previous downtrend (from 2008) which is now at 1.1395 ”.