EUR/USD Lingers at 1.0710 Amid Mixed Market Cues

The EUR/USD pair presents a subdued profile, trading near 1.0710 in the Asian session on Thursday.

The pair’s movement indicates an absence of strong directional bias, though the Euro retains some strength against mixed economic signals from the Eurozone and Germany.

Data released by Eurostat on Wednesday showed a 0.3% month-on-month decrease in Retail Sales for September, an improvement over August’s 0.7% fall, but slightly more than the 0.2% predicted by the market. Year-on-year, there was a 2.9% decline in September, which, while worse than August’s 1.8% fall, was better than the forecasted 3.2%.

The German Harmonized Index of Consumer Prices remained unchanged in October’s monthly and annual figures, with a 0.2% monthly drop and a consistent 3.0% yearly growth.

China’s Consumer Price Index also revealed a contraction of 0.2% year-on-year for October, marginally more than the 0.1% forecasted. The month-on-month figures showed a 0.1% drop, diverging from the previous month’s 0.2% rise.

On the flip side, the subdued US Treasury yields have imposed pressure on the US Dollar, even as the broader market sentiment appears upbeat. The US Dollar Index is trending downwards, marking a continuation of losses. Nonetheless, Federal Reserve officials have expressed reluctance to pivot towards rate reductions, offering some support to the Dollar.

Fed Governor Michelle Bowman emphasized potential short-term rate hikes by the Federal Reserve, while Neil Kashkari, President of the Minneapolis Fed, questioned whether the rate increases thus far have been adequate, considering the persistent strength of the US economy.

Investors are poised to evaluate the forthcoming US weekly Jobless Claims for its bearing on the market, alongside expectations for Federal Reserve Chair Jerome Powell’s panel discussion participation later in the day.

EUR/USD Technical Outlook

The EUR/USD pair has shown a bullish rebound after nearing the 1.0640 level, aided by the EMA50’s supportive stance, suggesting possible upward testing to 1.0760 in the near term. However, the stochastic oscillator is indicating a loss of bullish momentum, which could prompt a retraction.

The pair is predicted to oscillate within a lateral range marked by 1.0640 support and 1.0760 resistance.

The breach of either boundary will be critical in defining its subsequent trajectory, with a break above resistance likely to incite a further bullish correction towards 1.0860. Conversely, a support breach may reignite the dominant bearish trend, potentially leading to the 1.0450 region as the subsequent principal target.

The expected trading range for today is between 1.0630 support and 1.0795 resistance, with a sideways trend anticipated for the day.

EUR/USD Live Chart