EUR/USD extends gains above 0.9900, next barrier at 1.0015. Euro gains more than 400 pips from last week’s low.US Dollar tumbles across the board on risk appetite and lower US yields.
The EUR/USD rose even further during the American session and climbed to 0.9977, reaching the highest level in a week. It remains near the top, up more than 150 pips for the day and 440 above last week’s low.
The next critical level on the upside is the parity area and the 1.0015 resistance area. On the flip side, now 0.9900 has become the initial support followed by 0.9850/55.
Weaker dollar driving EUR/USD higher
On Tuesday, the August JOLTS (Job Openings report) showed the largest monthly decline on record from 11.17 million to 10.05, a possible sign of a slowdown in the job market. The negative report follows the larger-than-expected slide in the September ISM Manufacturing Index released on Monday. On Wednesday, the ADP report is due and on Friday the critical NPF report.
The latest round of US data below expectations contributed to the rally in EUR/USD by weakening the US dollar. The combination of lower US yields and higher equity prices are still affecting the greenback. The DXY is falling by more than 1% trading under 110.50. The US 10-year yield stands at 3.61% near weekly lows, and significantly away from levels above 4% it reached six days ago. In Wall Street, the Dow Jones is rising by 2.50% and the Nasdaq by 3.15%.
Despite the latest data, the Federal Reserve is still seen raising interest rates in order to curb inflation. The same situation applies to the European Central Bank. In a speech on Wednesday, Christine Lagarde said it is difficult to tell if inflation is at a peak. “The minimum that we have to do is to stop stimulating demand,” Lagarde added.
EUR/USD continues to push higher toward parity
EUR/USD has preserved its bullish momentum and climbed to its highest level in nearly two weeks above 0.9970. The risk-positive atmosphere, as reflected by impressive gains recorded in Wall Street’s main indexes, weighs heavily on the dollar and fuels the pair’s rally.
GBP/USD clings to strong daily gains above 1.1400
GBP/USD has managed to regain its traction and climbed above 1.1400 after having tested 1.1300 earlier in the day. The dollar stays under selling pressure as risk flows continue to dominate the financial markets and the US Dollar Index stays deep in red below 110.50.
Gold confirming an interim bottom
Bets on less aggressive quantitative tightening spurred risk appetite. The dollar’s sell-off extends for a second consecutive day, hinting at interim bottoms. XAUUSD turned bullish and will likely keep rallying as long as above $1,707.70.