GBPUSD is expected to pull EURUSD today’s morning

VOT Research Desk

Market Analytics and Considerations

EURUSD moves up and down in a tight channel below 1.0400 early Thursday while waiting for the next catalyst. October Harmonized Index of Consumer Prices will be featured in the European docket ahead of mid-tier data releases from the US and Fedspeak.

As investors evaluate the most recent remarks made by European Central Bank (ECB) officials, EURUSD has been finding it difficult to gain from the selling pressure around the US Dollar (USD). In order to draw bulls, the pair must consolidate above its current trading range at about 1.0400.

Pablo Hernandez de Cos, a policymaker at the European Central Bank (ECB), stated on Wednesday that the euro’s balance sheet contraction must be extremely orderly and foreseeable. Similar to this, ECB Vice President Luis de Guindos stated that the balance sheet decrease must be carried out with caution and that passive monetary tightening will be the first step. Ignazio Visco, a member of the ECB Governing Council, added that there was growing support for using a less aggressive strategy.

The EURUSD is still in corrective motion. According to VOT economists, as attention turns to the UK Autumn Budget, Sterling may drive the Euro down.

The projected trading range for the near future is 1.0270-1.0500.

Press reports that the ECB prefers a 50 bps hike in December over a 75 bps boost have not had much of an impact on the euro. An argument might be made that the 1.05 region is now a slightly firmer ceiling for 4Q22 because the FX options market has not yet demonstrated symptoms of distress, as evidenced by the fact that investors are not rushing to buy euro call options.

As it was in September, expect GBPUSD to push EURUSD around today. Our anticipated short-term trading range for the EURUSD is 1.0270-1.0500.

The lower boundary of the ascending regression channel is being slightly breached by the EURUSD market. However, the four-hour chart’s Relative Strength Index (RSI) indicator remains close to 60, and the 20-period Simple Moving Average (SMA) is unmoved, indicating a lack of seller interest.

Initial resistance is 1.0400 (psychological level, static tier). If the EURUSD price moves higher than that point, it may begin to move in the direction of the rising channel’s support line, with the targets of 10450 (the static barrier) and 1.0500. median-point of the channel

Daily Moving Averages

Indicators

EUR/USD