EUR/USD regains the smile and advances beyond 0.9900.The dollar appears offered ahead of key US data results.
The single currency manages to set aside Monday’s strong pullback and motivates EUR/USD to pick up pace and reclaim the region above the 0.9900 hurdle on Tuesday.EUR/USD focused on USD dynamics.
EUR/USD partially reverses the deep rejection from last week’s tops near 1.0100 and embarks on a corrective upside north of 0.9900 the figure amidst the renewed offered stance in the dollar and declining US and German yields.
On the latter, the German 10-year bund yields fade two daily gains in a row and challenge the key 2.00% level following the bearish move in their US peers.
Nothing worth mentioning data wise in the euro area, whereas the always-relevant ISM Manufacturing will be in the centre of the debate across the pond seconded by final figures of the S&P Global Manufacturing PMI, JOLTs Job Openings and Construction Spending.
What to look for around EUR
EUR/USD manages to attract some dip buyers and spark a corrective bounce to the region beyond the 0.9900 barrier on Tuesday, all accompanied by the selling mood hitting the dollar.
In the meantime, price action around the European currency is expected to closely follow dollar dynamics, geopolitical concerns and the Fed-ECB divergence. The resurgence of speculation around a potential Fed’s pivot seems to have removed some strength from the latter, however.
Furthermore, the increasing speculation of a potential recession in the region – which looks propped up by dwindling sentiment gauges as well as an incipient slowdown in some fundamentals – adds to the fragile sentiment around the euro in the longer run.
EUR/USD levels to watch
So far, the pair is gaining 0.53% at 0.9929 and faces the next up barrier at 1.0093 (monthly high October 27) followed by 1.0197 (monthly high September 12) and finally 1.0368 (monthly high August 10). On the downside, a breach of 0.9871 (weekly low November 1) would target 0.9704 (weekly low October 21) en route to 0.9631 (monthly low October 13).
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