The Euro (EUR) shows slight vulnerability against the US Dollar (USD), causing EUR/USD to remain below the 1.0600 level at the start of trading.
 
The Greenback has regained stability after a strong surge on Tuesday, pushing the USD Index (DXY) around 106.00, influenced by variations in US yields.
 
Regarding monetary policy, market participants have increased expectations that the Federal Reserve (Fed) will maintain its current position, keeping interest rates steady at the upcoming meeting on November 1. This confidence is bolstered by recent statements from Fed Chair Jerome Powell during his speech at the Economic Club of New York.
 
Meanwhile, investors are considering the possibility that the European Central Bank (ECB) may halt its tightening efforts, despite inflation exceeding the bank's target, amid concerns about the risks of economic slowdown or stagflation in the Eurozone.
 
In the Eurozone's economic calendar, all eyes will be on the release of the German Business Climate, measured by the IFO Institute for October.
 
In the US, weekly mortgage applications, typically monitored by the MBA, are due later today, ahead of the New Home Sales data for September.
 
Daily News Impacting the Market: Euro Continues to Face Pressure Below 1.0600
  • EUR maintains a bearish bias against the USD.
  • US and German yields trade without a clear direction.
  • The possibility of the Fed raising rates in December remains open.
  • ECB is predicted to keep interest rates stable on October 26.
  • Geopolitical turmoil appears to be subsiding.
  • Inflation in Australia saw a surprising increase in Q3.
  • ECB's Christine Lagarde will deliver a speech during this session.

Technical Analysis: Euro at Risk of Further Decline
 
EUR/USD is trading near 1.0580 after a retracement on Tuesday.
 
In a continued selling scenario, support can be found around 1.0495 (low from October 13) and 1.0448 (yearly low on October 3), before reaching the round number of 1.0400. A strong break below this zone could lead the pair lower towards 1.0290 (low from November 30, 2022) and 1.0222 (low from November 21, 2022).
 
On the buying side, EUR/USD will face initial resistance at 1.0694 (peak from October 25), which also coincides with the 55-day Simple Moving Average (SMA). A penetration of this area would pave the way to the September 12 peak at 1.0767, before reaching the key 200-day SMA at 1.0815.
 
Also Read :
 
 
A breakout above this level may signal further upside potential towards the August 30 high at 1.0945, even reaching the psychological level of 1.1000. If positive momentum continues, the pair may challenge the August 10 peak at 1.1064, the July 27 peak at 1.1149, and even the yearly high of 1.1275 recorded on July 18.
 
As long as EUR/USD remains below the 200-day SMA, bearish pressure on the pair is likely to persist.


Warning!
 
This analysis is based on fundamental and technical perspectives from trusted sources and should not be considered as advice or an invitation. Always remember that this content aims to enrich readers' information. Always conduct independent research regarding other forex information for your trading reference.
 
Stay updated with the latest news and articles from GIC Indonesia daily on Google News for the latest updates in the forex and crypto world. Also, trade at GICTrade using an ECN account to enjoy trading with low spreads starting from zero!