Euro gains ground against the US Dollar.

The Euro (EUR) continues to strengthen against the US Dollar (USD), propelling EURUSD to multi-session highs near 1.0730 on Tuesday.

When measured by the USD Index (DXY), the Greenback, on the other hand, wanders lower and revisits the mid-105.00s, continuing the slow drop from last week’s high around 106.00.

The corrective knee-jerk in the Dollar comes despite more deterioration in US rates across multiple periods, always against the backdrop of a persisting gap between recent aggressive Federal Reserve comments. and investor expectations of a prolonged delay in the Fed’s normalization agenda.

Recent comments from European Central Bank (ECB) Council members continue to suggest to a protracted pause in the current restrictive approach as inflation remains high and well above the target.

The euro gained further strength as Economic Sentiment in Germany and the eurozone climbed to 9.8 and 13.8, respectively, for the current month. Still in the eurozone, another revision saw the GDP Growth Rate shrink 0.1% QoQ in Q3 and rise 0.1% year on year.

Daily market movers: The euro consolidates its recovery over 1.0700.

The EUR surpasses the crucial 1.0700 level against the USD.

Further downturn appears to be in the cards. yields in both the United States and Germany.

Investors believe the Federal Reserve will not hike interest rates in December.

The ECB’s tightening effort looks to have come to a halt.

Fears of FX intervention remain centered on the USDJPY.

The Economic Sentiment is up next in the eurozone.

Later in the session, the key event will be the US Inflation Rate.

The UK labor market report surprised on the positive side.

Technical Outlook

The Euro is presently focusing on the 200-day SMA.

On Tuesday, the EURUSD maintains its bullish tone and breaks above the important 1.0700 level.

If the recovery continues, EURUSD may return to the November high of 1.0754 (November 6) before reaching the 200-day SMA at 1.0801 and the weekly high of 1.0945 (August 30). The psychological appears the August peak of 1.1064 (August 10) is followed by another weekly high of 1.1149 (July 27), both of which precede the 2023 peak of 1.1275 (July 18).

If sellers retake control, the pair may encounter temporary resistance at the 55-day simple moving average at 1.0637, ahead of the weekly low of 1.0495 (October 13) and the 2023 low of 1.0448 (October 15).

So far, more decrease in the pair is anticipated as long as it remains below the 200-day SMA.