The 50 DMA is at 1.0000 as the EUR/USD seeks to rebound.

Oct 06, 2022

VOT Research Desk

As the US currency licks its wounds, EUR/USD tries to bounce.

Despite the positive atmosphere, US yields move slowly, supporting the pair.

Ahead of ECB minutes, the 50 DMA continues to be a difficult nut for EUR bulls to break.

Before the European market opens, EUR/USD is attempting a little comeback just over 0.9900 as the dollar licks its wounds from the sharp decline it saw in the US previous session.

This Thursday’s mixed US ADP and ISM Services PMI have dampened expectations for a hawkish Fed rate move, but investors are still upbeat so far. However, it has had little effect on the market’s current estimate of a 65% probability of a 75 basis point Fed rate rise in November.

The primary currency pair is supported by the US Treasury rates, which are trading defensively due to uncertainty over the Fed’s tightening future. Bulls on the euro maintain their caution despite the major’s fresh upward movement in the face of rising geopolitical tensions between the West and Russia over the Ukraine crisis. On Wednesday, the European Union (EU) supported more sanctions on Russia, including the oil price ceiling.

All eyes are now focused on the Eurozone Retail Sales, the ECB minutes, and Fedspeak for new incentives as risk patterns and geopolitical news continue to develop.

EUR/USD Technical Analysis Report

The extension of a falling wedge breakout is constrained by the bearish 50-Daily Moving Average (DMA) at 1.0008, suggesting that nothing technical has changed for the major.

The pair is now trading around 0.9887, just above the horizontal 21 DMA, due to the rejection at higher levels. Inability to withstand the latter will reveal the psychological level 9950.