EUR/USD Upside Momentum Faces Headwinds Despite Recovery
- The EUR/USD pair extends its recovery to near 1.0830 in Friday’s North American session.
- US Dollar Index (DXY) correction below 104.00 puts pressure on the Greenback.
- Multiple headwinds maintain a downside bias for the EUR/USD pair.
Despite the recovery in the EUR/USD pair towards 1.0830, the US Dollar faces correction below 104.00 on the DXY, contributing to the pair’s upside momentum. The recent decline in US Durable Goods Orders by 0.8% in September, slower than expected, has added pressure on the US Dollar.
Market Expectations and Economic Landscape
- Expectation for a significant ECB rate cut in December adds to the Euro’s woes.
- Fed likely to pursue a gradual rate-cut cycle amidst economic data support.
The Eurozone’s economic activity shows signs of contraction, as indicated by the decline in the flash Composite PMI to 49.7 in October. The manufacturing sector continues to contract while the service sector growth has slowed down, reflecting uncertainty in economic growth.
Speculation around a substantial ECB rate cut in December has increased, with policymakers hinting at a 50 bps reduction to address inflationary pressures below the bank’s target. ECB Governor Mario Centeno’s remarks highlight the accumulation of downside risks to growth.
Technical Analysis and Outlook
The EUR/USD pair aims to establish a position above 1.0800, but the bearish sentiment persists as it remains below the 200-day EMA at 1.0900. A bearish reversal was triggered by a Double Top breakdown near 1.1000, leading to a downward trend.
The 14-day RSI indicates strong bearish momentum, although an oversold condition suggests a potential recovery. Key support levels include 1.0700 and an upward trendline at 1.0750, while resistance levels stand at 1.0900 and 1.1000.
Euro Price Movement Today
The table below shows the percentage change of the Euro (EUR) against major currencies today, with notable strength against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.10% | -0.17% | 0.00% | -0.10% | -0.07% | 0.06% | 0.01% |
Insight into Durable Goods Orders
The Durable Goods Orders measure manufacturers’ orders for long-lasting goods like vehicles and appliances. The recent decline in September reflects the sensitivity of these goods to the US economic climate. A high reading is generally bullish for the USD.
Read more about Durable Goods Orders.
Last release: Fri Oct 25, 2024 12:30
Actual: -0.8%
Consensus: -1%
Previous: 0%
Source: US Census Bureau