EUR/USD Navigates Recovery Amidst Global Economic Fluctuations: Analyzing Influences and Technical Perspectives

In the Asian session on Friday, the EUR/USD pair is making a rebound, trading closer to 1.0670, following a recent dip.

Written by: Arslan Butt • Friday, November 10, 2023 • 2 min read

• Last updated: Friday, November 10, 2023

In the Asian session on Friday, the EUR/USD pair is making a rebound, trading closer to 1.0670, following a recent dip. This downturn in the EUR/USD was largely a response to US Federal Reserve Chair Jerome Powell’s assertive statements at an International Monetary Fund (IMF) panel discussion on Thursday.

Chair Powell’s recognition of the inadequacy of current measures to effectively tackle inflation implies the likelihood of additional rate increases. Consequently, US Treasury yields experienced a significant upsurge, nearing 3.0%, which played a key role in bolstering the US Dollar (USD). Following these developments, the US Dollar Index (DEX) neared the crucial 106.00 level, and yields on 10-year US bonds hit a daily peak of 4.65%.

Recent US labor market data showed weekly Initial Jobless Claims at 217K for the week ending November 4, marginally lower than the 218K predicted and the prior week’s 220K. This data could reinforce perceptions of a strong US labor market, potentially offering further strength to the USD and impacting the EUR/USD dynamics.

The Euro (EUR) is navigating through mixed indications about the European Central Bank’s (ECB) forthcoming policy decisions. Current market estimations hint at a 30% probability of an interest rate reduction in March. ECB Vice President Luis de Guindos’s recent remarks suggest it’s too early to consider rate cuts, which may exert additional pressure on the Euro.

China’s latest inflation figures for October showed a downturn, intensifying concerns over its economic health. These concerns are curtailing investor interest in riskier assets like the EUR/USD pair.

Market participants are now focusing on the upcoming preliminary US Michigan Consumer Sentiment Index for November and the UoM 5-year Consumer Inflation Expectation, along with ECB President Christine Lagarde’s address at an event in London on Friday. These developments are anticipated to provide further direction for EUR/USD traders.

EUR/USD Technical Outlook

Currently, the EUR/USD pair exhibits a slight bearish tilt, influenced by stochastic negativity, yet the possibility of sideways movement remains, bounded by the 1.0640 support and 1.0760 resistance levels.

A decisive break beyond either threshold will clarify the pair’s future trajectory.

EUR/USD Live Chart

EUR/USD

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ABOUT THE AUTHOR See More

Arslan Butt

Lead Markets Analyst – Multi-Asset (FX, Commodities, Crypto)

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.