EUR/USD Shows Signs of Recovery
EUR/USD experienced a slight recovery after hitting 1.0900 on Thursday, showing a potential loss of bearish momentum. The pair is currently trading around 1.0950 in the European session on Friday, indicating a possible shift in sentiment.
US Economic Calendar Impact
- Producer inflation data for September will be highlighted on the US economic calendar.
Following the release of September inflation data from the US, EUR/USD initially declined during early American trading hours. However, disappointing labor market figures weakened the US Dollar’s position, allowing for a rebound in the pair.
The US Bureau of Labor Statistics reported a decline in the Consumer Price Index (CPI) to 2.4% on a yearly basis in September from 2.5% in August. Despite this, the core CPI, excluding volatile items, exceeded expectations at 3.3% annually. Additionally, weekly Initial Jobless Claims rose to 258,000, signaling ongoing challenges in the labor market.
Investors are now awaiting the release of the Producer Price Index (PPI) data, with expectations of a 0.2% increase in core PPI for September. A positive outcome could support the USD and limit the upside potential for EUR/USD.
EUR/USD Technical Analysis
The Relative Strength Index (RSI) on the 4-hour chart suggests a weakening bearish trend for EUR/USD. Key levels to watch include 1.0950 as immediate support, followed by resistance levels at 1.1000 and 1.1050. Alternatively, a break below 1.0950 could lead to support levels at 1.0900, 1.0870, and 1.0800.
Euro FAQs
1. Euro Overview
The Euro is the common currency for 19 European Union countries in the Eurozone. It is the second most traded currency globally, with EUR/USD being the most traded currency pair. The European Central Bank (ECB) in Frankfurt manages monetary policy for the Eurozone.
2. ECB Monetary Policy
The ECB’s primary goal is to maintain price stability through interest rate adjustments. High interest rates benefit the Euro, while low rates can weaken it. The ECB Governing Council makes policy decisions eight times a year.
3. Eurozone Inflation and Data
Eurozone inflation data impacts the Euro. High inflation may prompt the ECB to raise rates, strengthening the currency. Economic indicators like GDP, PMIs, and trade balance also influence the Euro’s value.
4. Trade Balance Impact
The Euro’s trade balance, measuring exports and imports, affects its value. A positive balance strengthens the Euro, while a negative balance can weaken it.