EUR/USD runs out of steam near 1.0580
The Euro (EUR) could not sustain the earlier bull run to the area of weekly highs around 1.0580 against the US Dollar (USD), prompting EUR/USD to rapidly give away those gains and refocus its attention to the downside once again on Tuesday. In the meantime, the Greenback keeps the bullish performance in place around the 106.30–106.40 band when tracked by the USD Index (DXY), setting aside Monday’s negative performance as selling pressure in the US fixed-income market persists.
Continuing to centre attention on monetary policy, investors anticipate that the Federal Reserve (Fed) will uphold its position of not implementing any interest rate adjustments throughout the remainder of the year. Meanwhile, participants in the financial markets contemplate the possibility of the European Central Bank (ECB) halting its interest-rate policy as well, despite inflation levels surpassing the bank's target and mounting concerns about an economic downturn or stagflation in the European region. On the euro docket, the Economic Sentiment in both Germany and the broader euro area tracked by the ZEW Institute came in above expectations at -1.1 and 2.3 for the month of October. In the US, Retail Sales expanded 0.7% MoM in September and Industrial Production expanded 0.3% MoM in the same month. Later in the NA session, the NAHB Housing Market Index, Business Inventories and speeches by FOMC Governor Michelle Bowman (permanent voter, hawk), NY Fed President John Williams (permanent voter, centrist), and Richmond Fed President Thomas Barkin (2024 voter, centrist) are all due.
EUR/USD comes under some mild downside pressure and returns to the 1.0550 region on Tuesday. Should the current upward trend persist, EUR/USD may revisit the October 12 high at 1.0639 ahead of the September 20 top of 1.0736 and the noteworthy 200-day Simple Moving Average (SMA) at 1.0821. A break above this point could lead to an attempt to surpass the August 30 peak of 1.0945 and approach the psychological milestone of 1.1000. Any further advances beyond the August 10 high of 1.1064 might potentially propel the pair towards the July 27 pinnacle at 1.1149 and even reach the 2023 top of 1.1275 seen on July 18. Conversely, in the event that selling pressure resumes, there is a chance of revisiting the 2023 low at 1.0448 seen on October 3 and possibly testing the significant support of 1.0400. If this threshold is breached, it could open the path to a retest of the lows at 1.0290 (November 30, 2022) and 1.0222 (November 21, 2022). As long as EUR/USD remains below the 200-day SMA, the potential for sustained downward pressure persists.
EUR/USD comes under some mild downside pressure and returns to the 1.0550 region on Tuesday. Should the current upward trend persist, EUR/USD may revisit the October 12 high at 1.0639 ahead of the September 20 top of 1.0736 and the noteworthy 200-day Simple Moving Average (SMA) at 1.0821. A break above this point could lead to an attempt to surpass the August 30 peak of 1.0945 and approach the psychological milestone of 1.1000. Any further advances beyond the August 10 high of 1.1064 might potentially propel the pair towards the July 27 pinnacle at 1.1149 and even reach the 2023 top of 1.1275 seen on July 18. Conversely, in the event that selling pressure resumes, there is a chance of revisiting the 2023 low at 1.0448 seen on October 3 and possibly testing the significant support of 1.0400. If this threshold is breached, it could open the path to a retest of the lows at 1.0290 (November 30, 2022) and 1.0222 (November 21, 2022). As long as EUR/USD remains below the 200-day SMA, the potential for sustained downward pressure persists.