EUR/USD Pressured After Tuesday’s Indecision
EUR/USD - H1
The pair struggled for direction yesterday as markets lacked conviction and risk tones were mixed, but today it slides, as risk-off mood prevailed during the Asia-Pacific session.
This was largely due to increased consumer and factory inflation figures for October in China (1.5% y/y and 13.5% y/y respectively), along with persistent concerns around the country's property market.
From recent Fed commentary, Mr Bullard's remarks for two rate hikes in 2022 [1] seemed to resonate more with investors, as the St. Louis Fed President is not a voter in 2021, but will be a voter next year.
These factors have created demand for the US Dollar - along with a rebound in US 10 Year yields - and have pushed the pair back below its EMA100, making it vulnerable to sub-1.1550 moves – in line with our recent analysis. This will keep the 1.1500-1.1492 area in the spotlight, but a break lower will need a catalyst.
Price action has been inconclusive so far this month and we need to see with what mood will the European markets open, as futures show an effort to shake off the negative undertone that has prevailed so far today. An improvement in sentiment would be supportive for the Euro and may give it a chance to reclaim 1.1600, although a larger recovery that will surpass the downward trend line from September (1.1640-50) seems tough under these conditions.
Today's US CPI Inflation release has the potential to determine the next leg of the move, with conventional wisdom suggesting that higher prints will be good for the USD.
Past Performance: Past Performance is not an indicator of future results.
Nikos Tzabouras
Senior Financial Editorial Writer
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. With extensive experience in market analysis and a strong foundation in international relations, he brings a unique perspective to financial markets. Nikos emphasizes not only technical analysis but also on fundamentals and the growing influence of geopolitics on financial trends.
As a Senior Financial Editorial Writer, he delivers comprehensive and forward-looking insights across a wide range of asset classes, including equities, commodities, and currencies. His work explores how macroeconomic events, political developments, and global policies impact market dynamics, providing readers with a deeper understanding of both short-term movements and long-term trends.
References
| Retrieved 10 Nov 2021 https://www.stlouisfed.org/from-the-president/video-appearances/2021/bullard-fox-business-economic-growth-jobs-interest-rates |
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