Nov 01, 2022
VOT Research Desk
On Tuesday, the EUR/USD pair reclaimed the 0.9900 level as the US dollar lost ground. The USD’s near-term weakness is being driven by falling US government bond yields and the approaching US Federal Reserve monetary policy decision, with the 10-year Treasury note yield falling far below 4%.
Risk-on movements benefited stock markets the most, with Asian and European indices registering significant gains and boosting Wall Street ahead of the US open. In terms of data, Germany released the September Import Price Index, which fell by 0.9% in September, far less than the 0.6% increase predicted.
The annual reading increased by 29.8%, less than the predicted 31.7%. Market traders are now anticipating the US ISM Manufacturing PMI, which is predicted to fall to 50 in October from 50.9 the previous month. The recent US GDP estimate, which showed the economy, grew at an annualized rate of 2.6% in the three months to September, dispelled fears of a recession.
However, if the ISM Manufacturing PMI goes below 50, concerns will certainly return.
EUR/USD Technical Analysis
According to the daily chart, the EUR/USD pair is trading near a daily high of 0.9947 and is modestly positive.
The Momentum indicator resumed its ascent towards overbought levels, while the RSI indicator bounced from about its midline, remaining in neutral territory.
Simultaneously, the pair is moving over a directionless 20 SMA, which is currently around 0.9840, while a bearish 100 SMA presents dynamic resistance at about 1.0070.
According to the 4-hour chart, the bullish potential appears to be limited in the near term. The pair is rising above the converging 100 and 200 SMAs, which are currently at 0.9835.
Meanwhile, the 20 SMA is firmly down, a few pips above the present level.
Finally, technical indicators rise with varying degrees of vigour but remain below their midpoints.
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