CFD Trading Rate Euro vs US Dollar (EURUSD)

• EUR/USD depreciates as traders adopt caution ahead of US Nonfarm Payrolls scheduled for Friday.
• The US Dollar rebounds as market caution persists amid uncertainty ahead of the upcoming US presidential election.
• The unexpected rise in Eurozone inflation has reinforced expectations that the ECB will adopt a cautious approach to rate cuts.

EUR/USD halts its four-day winning streak, trading around 1.0870 during the Asian session on Friday. This downside is attributed to the improved US Dollar (USD) due to ongoing market caution amid uncertainty leading up to the upcoming US presidential election.

On Thursday, the US Dollar encountered difficulties as the US Personal Consumption Expenditures (PCE) Price Index indicated that core inflation rose by 2.7% year-over-year in September. The monthly core PCE Price Index rose 0.3%, in line with the consensus. However, Initial Jobless Claims fell to a five-month low of 216,000 for the week ending October 25, signaling a resilient labor market and reducing expectations for imminent rate cuts by the Federal Reserve (Fed).

Traders are awaiting the Nonfarm Payrolls (NFP) report set for release on Friday. The US economy is projected to have added 113,000 jobs in October, with the Unemployment Rate expected to remain unchanged at 4.1%.

The annual inflation rate in the Eurozone increased to 2.0% in October, up from the previous 1.7% reading and surpassing forecasts of 1.9%. The core inflation rate held steady at 2.7% year-over-year. This rise in inflation is supported by stronger-than-anticipated economic growth, with the Eurozone economy expanding by 0.4% quarter-on-quarter in Q3, twice the growth seen in Q2 and exceeding predictions of 0.2%.

This unexpected increase in inflation data has bolstered expectations that the European Central Bank (ECB) will maintain a cautious approach to rate cuts, steering clear of significant reductions.

The ECB has highlighted that inflationary pressures remain elevated, primarily due to wage growth. In its recent October meeting, the ECB reaffirmed its commitment to a "data-dependent and meeting-by-meeting" strategy for future policy decisions.

• EUR/USD edges higher to 1.0885 in Thursday’s early Asian session. 
• US inflation increased slightly in September and moved closer to the Fed’s target. 
• ECB policymakers expect a temporary increase in inflation later this year. 

The EUR/USD pair extends the rally to 1.0885 during the early Asian session on Friday. The uptick of the major pair is bolstered by the weakening of the US Dollar (USD). All eyes will be on the US Nonfarm Payrolls (NFP), which is due later on Friday. 

The US Personal Consumption Expenditures (PCE) Price Index, rose 2.1% on a yearly basis in September, compared to 2.2% in August, the US Bureau of Economic Analysis (BEA) reported on Thursday. This figure came in line with market expectations. On a monthly basis, the PCE increased 0.2%, as expected. 

Meanwhile, the core PCE Price Index, which excludes volatile food and energy prices, jumped 2.7% in the same period, matching August's rise and above the market estimation of 2.6%. The core PCE Price Index rose 0.3% on a monthly basis, in line with the consensus. 

Traders will keep an eye on the release of US employment data on Friday, including the Nonfarm Payrolls (NFP), Unemployment Rate and Average Hourly Earnings. The stronger-than-expected outcome could dampen the hope for larger bets of the US Federal Reserve (Fed) rate cut, boosting the Greenback against the Euro (EUR). 

Across the pond, the European Central Bank (ECB) noted that inflation pressures remain high, driven by wage growth. During its latest meeting in October, the ECB reiterated its commitment to a "data-dependent and meeting-by-meeting" approach to future policy decisions. The money markets are currently pricing in a 34 basis points (bps) rate cut, down from 42 bps in the previous day, suggesting that the possibility of a larger 0.5% cut is diminishing.

Eurozone CPI rose 2.0% this month, according to the preliminary estimate released earlier. That is a little above the forecast of 1.9% and above September’s 1.7% read, Scotiabank’s Chief FX Strategist Shaun Osborne notes.  

EUR nudges higher on the day

“The data helped sway market pricing further towards a 25bps ECB cut in December (29bps of easing now priced in) and narrow 2Y EZ/US spreads a little further to provide the EUR with a small tailwind.”

“Consolidation signals from earlier this week are developing into a little more obvious technical strength for the EUR on the short-term chart. EUR gains through 1.0840/45 yesterday suggest a short-term low is in while gains through 1.0875 should allow for the EUR rebound to develop a little more momentum to test the low/mid 1.09s.”

• EUR/USD clings to gains near 1.0850 on upbeat Eurozone GDP growth and hot German inflation.
• ECB Lagarde sees more interest-rate cuts and said she is hopeful about inflation returning to the bank’s target of 2%.
• The US Dollar will be influenced by the US presidential election, NFP, and the ISM Manufacturing PMI data.

EUR/USD holds up near 1.0850 in Thursday’s European session following Wednesday’s sharp recovery. The major currency pair strengthened as traders have pared back bets of a large interest-rate cut from the European Central Bank (ECB) in the December monetary policy meeting after a faster-than-expected Eurozone Gross Domestic Product (GDP) growth and hotter-than-forecasted German inflation.

Eurostat reported on Wednesday that the Eurozone expanded at a faster pace of 0.9% in the third quarter of the year compared with the same period a year earlier. A major contribution to higher growth in the Eurozone came from its largest nation, Germany, which managed to dodge a technical recession. The German economy surprisingly rose by 0.2% compared with the previous quarter, beating expectations of a 0.1% contraction. Meanwhile, the growth rate in Spain was higher than expected, as forecasted in France, and slower than anticipated in Italy.

The German flash Harmonized Index of Consumer Prices (HICP) for October accelerated at a faster pace of 2.4% on year, higher than estimates of 2.1% and the prior release of 1.8%, suggesting that the battle against inflation is yet not over. 

"The just-released flash estimate of German inflation in October could make some members of the ECB regret the latest rate cut and the European Central Bank's new openness to more aggressive cuts," said analysts at ING.

For more cues on the current status of inflation, investors will focus on the Eurozone flash HICP data for October, which will be published at 10:00 GMT.

Meanwhile, ECB President Christine Lagarde has shown confidence about taming price pressures in an interview with the French newspaper Le Monde published on Thursday. “The objective is in sight, but I am not going to tell you that inflation is under control,” Lagarde said. She reaffirmed her commitment to interest rate reduction, but refrained from committing to a specific rate cut path.

Daily digest market movers: EUR/USD holds up while US Dollar consolidates

• EUR/USD clings to gains near 1.0850 on upbeat Eurozone GDP data. Even though higher Eurozone GDP growth has improved the Euro’s (EUR) appeal, its outlook is still in danger amid uncertainty ahead of the United States (US) presidential election. 
• Traders seem to have priced in a victory from former President Donald Trump against current Vice President Kamala Harris, a scenario that would have significant repercussions on the Eurozone economy as Trump is expected to raise tariffs by 10% on all imports, hitting the Eurozone’s powerful export sector. Trump said this week that the European Union (EU) would have to "pay a big price" for not buying enough American exports if he won the November 5 election, Reuters reported.
• Meanwhile, the US Dollar (USD) trades in a tight range, with investors focusing on the US Nonfarm Payrolls (NFP) and the ISM Manufacturing PMI data for October, which will be published on Friday. The economic data will influence market speculation for the Federal Reserve (Fed) interest rate cut path. Later on Thursday, the Personal Consumption Expenditure (PCE) Price Index data for September will also be published, although its impact on markets is expected to be limited because the US GDP report on Wednesday already unveiled the overall figures for Q3.
• Job market conditions appear to be improving, according to the ADP gauge of private employment released on Wednesday. The report showed a robust labor demand, with 233K new workers hired in October against 159K in September.

Technical Analysis: EUR/USD strives to sustain above 1.0800

EUR/USD trades close to a fresh more than a week high around 1.0850 in European trading hours. The major currency pair holds onto its recent recovery after breaking above the round-level resistance of 1.0800. However, its broader outlook is still bearish as it trades below the 200-day Exponential Moving Average (EMA) at around 1.0900.

The 14-day Relative Strength Index (RSI) climbs to near 42.00 after staying in the 20.00-40.00 range for almost a month, suggesting that the bearish momentum has terminated.

Looking up, the shared currency pair could rise to near the 200-day EMA around 1.0900 and the September 11 low around 1.1000. On the downside, the upward-sloping trendline near 1.0750, which is plotted from the April 16  low at around 1.0600, will be the key support area for the Euro bulls.

• EUR/USD attracts fresh sellers on Thursday amid a modest USD strength.
• Bets for smaller Fed rate cuts and elevated US bond yields benefit the USD.
• Diminishing odds for aggressive ECB easing could limit losses for the pair.

The EUR/USD pair meets with some supply during the Asian session on Thursday and erodes a part of the previous day's gains to the 1.0870 area, or a one-and-half-week top. The downtick is sponsored by the emergence of some US Dollar (USD) dip-buying and drags spot prices below mid-1.0800s in the last hour.

The incoming US macro data continues to suggest that the economy remains on a strong footing and supports prospects for a less aggressive policy easing by the Federal Reserve (Fed), which, in turn, helps revive the USD demand. In fact, the ADP reported on Wednesday that private-sector employers added 233K new jobs in October. The growth in employment is expected to boost consumer spending and contribute to overall growth, validating the view that the Fed will proceed with smaller rate cuts.

Separately, the US Bureau of Economic Analysis' initial estimate indicated that the world's largest economy grew by a 2.8% annualized pace during the April-June period, slower than the 3% in the previous quarter. This, however, did little to influence expectations about the Fed's rate-cut path. Adding to this, concerns about increasing US fiscal deficit push the US Treasury bond yields higher, assisting the USD to stall its corrective slide from a three-month top and exerting pressure on the EUR/USD pair. 

Meanwhile, the Eurozone data released on Wednesday showed inflationary pressure in Germany remains sticky. Furthermore, the German economy – the Eurozone's powerhouse – unexpectedly grew by 0.2 % quarter-on-quarter in the third quarter. This forced investors to pare their bets for a jumbo rate cut by the European Central Bank (ECB), which could offer some support to the shared currency and the EUR/USD pair ahead of Thursday's release of the flash Eurozone consumer inflation figures. 

Later during the early North American session, the US Personal Consumption Expenditure (PCE) Price Index could provide fresh cues about the Fed's interest rate outlook and drive the US bond yields. Apart from this, the broader risk sentiment will drive demand for the safe-haven Greenback and contribute to producing short-term trading opportunities around the EUR/USD pair.

• EUR/USD edges higher to around 1.0855 in Thursday’s early Asian session. 
• Private sector employment increased by 233,000 jobs in October. 
• The Eurozone HICP and the US PCE inflation data will be in the spotlight on Thursday. 

The EUR/USD pair attracts some buyers to near 1.0855 during the early Asian session on Thursday. The weakening of the US Dollar (USD) and the better-than-expected Eurozone flash Gross Domestic Product (GDP) for the third quarter provides some support to the major pair.

The US economy grew at an annualised rate of 2.8% in the third quarter (Q3), slightly lower than the 3% estimated by economists. Meanwhile, private sector employment rose by 233,000 jobs in October, compared to September's reading of 159,000 (revised from 143,000), according to the October ADP National Employment Report. 

The US Dollar index (DXY), which measures the USD against six major rivals, retreats to weekly lows of 104.09 after reaching the highest since July 30 at 104.63 on Tuesday. Uto Shinohara, senior investment strategist at Mesirow Currency Management in Chicago, said the markets expect a 25 basis points (bps) cut in the November meeting, but another cut in December remains a coin flip.

The Eurozone economy expanded 0.4% QoQ in the third quarter of 2024, according to Eurostat's preliminary estimates, stronger than the 0.2% expected. On an annual basis, Eurozone GDP grew by 0.9% in Q3, above the market consensus of 0.8%. 

Investors will keep an eye on the Eurozone Harmonized Index of Consumer Prices (HICP) and the US Personal Consumption Expenditures (PCE) - Price Index data, which are due later on Thursday.

GDP data reports for Q3 from France, Spain and Germany all beat expectations, lifting preliminary Eurozone growth to 0.4% in the quarter, double expectations, Scotiabank’s Chief FX Strategist Shaun Osborne notes.  

EUR firms on stronger than expected growth data

“The economy grew 0.9% over the year. Meanwhile, state-level inflation data in Germany was stronger than expected, suggesting the preliminary national data at 9ET risks coming in hotter than the 0.2% forecast. Strong data lifted European yields and prompted a further repricing of ECB easing expectations for December (31-32bps of easing priced in, from 35bps or so yesterday). That still looks too much.”

“Data reports and yields combined to lift the EUR to the mid-1.08s before it eased back. The EUR has shown signs of stabilizing just below 1.08 over the past few trading sessions. Support has been firm on dips to the 1.0760/70 area. This morning’s push higher in spot has not (yet, at least) developed much traction, however.”

“Gains push through 1.0840 which should have been a bull trigger for additional gains but the EUR rally has sputtered and key short-term resistance at 1.0875 remains untested. More range-trading around 1.08 may follow in the next few days.”

The Euro (EUR) held up above 1.08-handle overnight albeit still near 2-month lows. EUR was last seen at 1.0841, OCBC’s FX analysts Frances Cheung and Christopher Wong note.

RSI is rising from near oversold conditions

“Quite a bit of negativity is in the price of EUR following recent dovish rhetoric out of ECB, softer growth/ economic momentum, USD strength and the fear of Trump win and the threat of that 10-20% tariff. But with much negativity in the price, we do caution for the risk of rebound if EU data this week surprise to the upside. 3Q GDP will be one to watch later today and CPI estimate will be key on Thu.”

“Momentum remains bearish though there are signs of it fading while RSI is rising from near oversold conditions. Resistance at 1.0830 (61.8% fibo retracement of 2024 low to high), 1.0870 (200 DMA), 1.0910/30 levels (21, 100 DMAs). Support at 1.0780, 1.0740 (76.4% fibo).

The Euro (EUR) is expected to trade in a range between 1.0790 and 1.0840. In the longer run, month-long decline has come to an end; EUR is expected to trade in a 1.0760/1.0885 range for the time being, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

Rangebound between 1.0790 and 1.0840

24-HOUR VIEW: “Yesterday, we expected EUR to ‘trade in a range, probably between 1.0790 and 1.0830.’ Our view was incorrect, as EUR fell sharply but briefly to 1.0768, rebounding to close largely unchanged at 1.0818 (+0.06%). The brief drop did not result in an increase in momentum. Today, we continue to expect EUR to trade in a range, likely between 1.0790 and 1.0840.”

1-3 WEEKS VIEW: “We turned negative in EUR early this month (see annotations in the chart below). As we tracked the decline, in our most recent narrative from last Friday (25 Oct, spot at 1.0825), we highlighted that ‘should EUR break above 1.0840, it would signal the end of the decline that started early this month.’ Yesterday, EUR dipped to 1.0768, then rebounded to a high of 1.0826. Although our ‘strong resistance’ level at 1.0840 has not been breached yet, downward momentum has largely faded. In other words, the month-long decline has come to an end. The current price movements are likely part of a range trading phase, and EUR is expected to trade between 1.0760 and 1.0885 for the time being.”

• EUR/USD stays sideways around 1.0800 ahead of key economic data releases from both the Eurozone and the US.
• The French economy rose by 0.4%, as expected, in the third quarter of the year.
• Trump’s victory in the US presidential election could have an adverse impact on the Eurozone growth.

EUR/USD trades close to Tuesday’s high slightly above 1.0800 in Wednesday’s European session. The major currency pair remains sideways for a third consecutive day as investors await key macroeconomic data from both the Eurozone and the United States (US) that is likely to inject volatility into the pair. 

In Europe, the October preliminary Harmonized Index of Consumer Prices (HICP) data from Germany and six of its states, and from Spain will indicate whether inflationary pressures continue to remain within the European Central Bank’s (ECB) target of 2%.

Economists estimate the German HICP to have grown at a faster pace of 2.1% from 1.8% in September, while inflation in Spain is expected to have remained below 2%.

Unless there is a big upside surprise, the impact of the inflation data is expected to be less significant on the ECB’s interest rate action in its upcoming policy meeting in December as officials see price pressures softening faster than what the central bank had anticipated.

Recent commentaries from ECB policymakers have indicated that they are worried about inflation remaining persistently lower due to weakening economic growth. Market participants are worried about the outlook of the Eurozone economy. 

Meanwhile, uncertainty ahead of the US presidential election persists. While national polls have indicated tight competition between former US President Donald Trump and current Vice President Kamala Harris, traders seem to be pricing in a Trump victory, which would have deep repercussions also for the Eurozone. 

Trump has promised a universal 10% tariff on all imports, except those from China, which would face even bigger tariffs. The threat of tariffs could impact the Eurozone’s powerful export sector significantly. Investment banking firm Goldman Sachs projects a 1% drop in the Eurozone’s Gross Domestic Product (GDP) if a universal 10% tariff is imposed.

In Wednesday’s session, investors will also focus on the flash Q3 GDP data of the Eurozone and its major regions. Market participants will pay close attention to German growth numbers as the region’s largest economy is forecasted to contract for the second quarter in a row.

Meanwhile, the preliminary French Q3 GDP grew at an expected pace of 0.4%, faster than 0.2% in the second quarter of this year.

Daily digest market movers: EUR/USD stays on sidelines as US Dollar rally stalls

• EUR/USD remains sideways as the rally in the US Dollar (USD) appears to have stalled. The USD faces pressure after weak United States (US) JOLTS Job Openings data for September has renewed fears of pain in the labor market. The US Dollar Index (DXY), which gauges Greenback’s value against six major currencies, drops to near 104.20.
• Tuesday’s Job Openings data showed fresh vacancies stood at 7.443 million, lower than estimates of 7.99 million and the prior release of 7.861 million. Weak job openings pointed to a slower labor demand, which kept Federal Reserve (Fed) dovish bets for the remaining year afloat. According to an October 23-29 Reuters poll, the Fed will cut interest rates by 25 basis points (bps) in policy meetings in November and December.
• For more interest rate cues, investors will focus on the ADP Employment Change and the flash US Q3 GDP data, which will be published in the North American session. Economists expect the private sector to have added 115K new workers in October, lower than 143K in September. Meanwhile, the US economy is expected to have grown at a steady pace of 3.0% on an annualized basis.
• Later this week, investors will keep an eye on the Nonfarm Payrolls and the ISM Manufacturing PMI data for October, and the Personal Consumption Expenditure Price Index (PCE) data for September.

Technical Analysis: EUR/USD stays within tight range around 1.0800

EUR/USD consolidates around 1.0800 in European trading hours on Wednesday. The shared currency pair continues to hold above the upward-sloping trendline near 1.0750, which is plotted from the October 3, 2023, low at around 1.0450 on the daily time frame. However, the broader outlook of the major currency pair remains bearish as it stays below the 200-day Exponential Moving Average (EMA), which trades around 1.0900.

The downside move in the shared currency pair started after a breakdown of a Double Top formation on the daily time frame near the September 11 low at around 1.1000, which resulted in a bearish reversal.

The 14-day Relative Strength Index (RSI) remains in the 20.00-40.00 range, pointing to more downside ahead.

On the downside, the major pair could see more weakness towards the round-level support of 1.0700 if it slips below 1.0750. Meanwhile, the 200-day EMA near 1.0900, and the psychological figure of 1.1000 emerge as key resistances.

• EUR/USD inches lower ahead of key economic data from the Eurozone and Germany.
• The risk-sensitive EUR may further depreciate due to prevailing uncertainty surrounding the US presidential election.
• Traders will shift their focus to US Gross Domestic Product (GDP) and ADP Employment Change data later in the day.

EUR/USD loses ground after two days of gains, trading around 1.0810 during the Asian hours on Wednesday. The Euro receives downward pressure as the European Central Bank (ECB) is widely anticipated to reduce its Deposit Facility Rate once again. Money markets are currently pricing in nearly a 50% chance of a 50 basis point rate cut during the December meeting.

Investors will closely watch preliminary Gross Domestic Product (GDP) data from Germany and the Eurozone, as well as Germany’s preliminary Harmonized Index of Consumer Prices (HICP) data, which are scheduled for release on Wednesday. The focus will shift to the preliminary US Q3 Gross Domestic Product (GDP) figures and October's ADP Employment Change release on Wednesday.

Recently, ECB policymakers have expressed varying views on monetary policy. Pierre Wunsch, the Governor of the National Bank of Belgium, noted that there is no pressing need for the central bank to speed up interest rate cuts, suggesting it could even accommodate a modest rate. In contrast, Mario Centeno, Governor of the Bank of Portugal, advocated for considering a 50 basis point rate cut as a viable option for December.

The downside of the EUR/USD pair could also be attributed to the higher US Dollar (USD) amid improved Treasury yields. The US Dollar Index (DXY), which measures the value of the US Dollar against six other major currencies, trades around 104.30 with 2-year and 10-year yields on US Treasury bonds standing at 4.09% and 4.24%, respectively, at the time of writing.

The risk-sensitive EUR/USD pair may further depreciate amid ongoing uncertainty surrounding the US presidential election. A three-day poll conducted by Reuters/Ipsos, which concluded on Sunday and was released on Tuesday, indicated that the race is essentially tied as the November 5 election approaches.

Vice President Kamala Harris, the Democratic candidate, has seen her lead over Republican nominee Donald Trump narrow to just one percentage point, with 44% support compared to Trump's 43%.

• EUR/USD posts modest gains to near 1.0820 in Wednesday’s early Asian session. 
• US job openings dropped to the lowest level since early 2021. 
• The ECB is widely anticipated to cut its Deposit Facility Rate again this year.

The EUR/USD pair recovers to around 1.0820 during the early Asian session on Wednesday. The upside for the major pair remains limited amid ongoing uncertainty ahead of the US presidential election and anticipation of key US data releases.

Job openings were down by 418,000 to 7.443 million by the last day of September, the lowest level since January 2021, according to the Labor Department's Bureau of Labor Statistics in its Job Openings and Labor Turnover Survey, or JOLTS report. This figure came in worse than the expectation of 7.99 million. 

Meanwhile, the US Conference Board’s Consumer Confidence Index rose to 108.7 in October from an upwardly revised 99.2 in September, above the market consensus of 99.5. This figure registered the highest in nine months as perceptions of the labor market improved. 

Traders increase their bets that the US Federal Reserve (Fed) will only cut rates by 25 basis points (bps) in the November meeting, attracting buyers of the US Dollar (USD). Later on Wednesday, the US ADP Employment Change for October and the advanced Gross Domestic Product (GDP) for the third quarter might offer some hints about the size and the pace of the US Fed rate cut. 

Across the pond, the European Central Bank (ECB) is widely expected to cut its Deposit Facility Rate again, but traders are split on whether the ECB will continue the rate-cut cycle with the usual pace of 25 basis points (bps) or go for larger reductions. Money markets are still pricing in nearly 50% odds of the ECB rate reductions by half a percentage point in the December meeting.

Investors will keep an eye on Germany’s preliminary Consumer Price Index (CPI) inflation data, along with the flash Q3 GDP Growth Rate from Germany and the Eurozone. The ECB’s Schnabel is scheduled to speak later in the day. 

ECB VP Guindos remarked that despite evidence that the disinflationary process in the Eurozone was ‘well on track’, there were substantial risks around the outlook for prices, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

EUR holds tight range in low 1.08s

“The comments are perhaps a further indication that ECB officials are not keen to ease policy as aggressively as market participants expect at this point.”

“Swaps continue to price in some 35bps of easing risk for December’s policy decision which looks a little rich on the basis of the past week’ more cautious messaging from officials. November Gfk Consumer Confidence improved to a slightly better than forecast –18.3 in November.”

“EUR/USD continues to consolidate. The recent pattern of trade does not preclude more losses but the EUR remains deeply oversold and the risk of a short-squeeze should not be underestimated. Note the daily RSI signal is edging marginally higher, reversing from over-extended levels. This is a potentially positive signal.”

Euro (EUR) continued to trade near recent lows amid broad USD strength, softer EU data and dovish ECBspeaks, which led markets to price in more dovish expectations (near 40% probability of 50bp cut at Dec meeting). EUR was last seen at 1.0818, OCBC’s FX analyst Frances Cheung and Christopher Wong note.

RSI is still near oversold conditions

“EU-UST yield differentials have also widened over the last few weeks, resulting in EUR falling. The risk of a Trump outcome also setup the threat of 10% tariff on all US imports and this may also undermine EUR. But with much negativity in the price, we do caution for the risk of rebound if EU data this week surprise to the upside.3Q GDP will be one to watch on Wed and CPI estimate will be key on Thu.”

“Momentum remains bearish though there are signs of it fading while RSI is still near oversold conditions. Resistance at 1.0830 (61.8% fibo retracement of 2024 low to high), 1.0870 (200 DMA), 1.0910/30 levels (21, 100 DMAs). Support at 1.0780, 1.0740 (76.4% fibo).”

• EUR/USD rises moderately above 1.0800 as investors await an array of macroeconomic data from the US and the Eurozone this week.
• US JOLTS Job Openings are estimated to have declined marginally in September.
• Traders doubt over the size of the ECB’s likely interest rate cut in December.

EUR/USD gains slightly near the round-level figure of 1.0800 in Tuesday’s European session. The major currency pair consolidates as the US Dollar (USD) clings to gains ahead of an array of United States (US) macroeconomic data this week and increasing uncertainty over the US presidential election, which will take place on November 5.

US Personal Consumption Expenditure Price Index (PCE) data for September, flash Q3 Gross Domestic Product (GDP), Nonfarm Payrolls, and ISM Manufacturing Purchasing Managers’ Index (PMI) data for October are lined up for release. The data will be key to influencing market expectations for the Federal Reserve’s (Fed) interest-rate path for the remainder of the year.

Economists expect the US economy to have created half of the jobs it added in September, the Manufacturing PMI to remain below the 50.0 threshold, inflation to have fallen slightly and the GDP to have expanded at a steady pace of 3% on an annualized basis.

Slower job growth would likely support market expectations for Fed interest rate cuts in December. Markets are pricing in a reduction in borrowing rates by 25 basis points (bps) in November and December, according to the CME FedWatch tool. 

In Tuesday’s session, investors will focus on the US JOLTS Job Openings data for September, which will be published at 14:00 GMT. Job vacancies are estimated to have dropped marginally to 7.99 million from 8.04 million in August.

Daily digest market movers: EUR/USD consolidates as investors await US JOLTS Job Openings

• EUR/USD has stayed in a limited range near 1.0800 in the last six trading days. The Euro (EUR) struggles for a direction as investors look for fresh cues about the size of the European Central Bank’s (ECB) likely interest rate cut in the last monetary policy meeting of the year in December. 
• The ECB is widely anticipated to cut Its Deposit Facility Rate again but traders doubt whether the central bank will continue the rate-cut cycle with the usual pace of 25 basis points (bps) or go for a larger trim. Market expectations for an ECB large rate cut increased after a few officials highlighted the risks of inflation remaining below the desired rate of 2%.
• The likelihood of the German economy ending the year with an economic recession has been a major reason behind the doubts about low inflation. For more cues on German and Eurozone economic growth, investors will pay close attention to the flash Q3 GDP for both economies, which will be published on Wednesday. 
• Economists estimate the German GDP to have contracted by 0.3% in Q3 compared with the same quarter a year earlier after remaining flat in Q2. In the same period, the Eurozone GDP is estimated to have expanded by 0.8%, faster than the former reading of 0.6%.
• On the same day, investors will also focus on the preliminary German and Spain Harmonized Index of Consumer Prices (HICP) data for October. Annual German HICP is expected to have grown at a faster rate of 2.1%, while inflation in Spain is estimated to have remained below 2%.

Technical Analysis: EUR/USD remains below 200-day EMA

EUR/USD continues to hold above the upward-sloping trendline near 1.0750, which is plotted from the October 3, 2023, low at around 1.0450 on the daily time frame. However, the broader outlook of the major currency pair remains bearish as it stays below the 200-day Exponential Moving Average (EMA), which trades around 1.0900.

The downside move in the shared currency pair started after a breakdown of a Double Top formation on the daily time frame near the September 11 low at around 1.1000, which resulted in a bearish reversal.

The 14-day Relative Strength Index (RSI) ticks up but remains in the 20.00-40.00 range, pointing to more downside ahead.

On the downside, the major pair could see more weakness towards the round-level support of 1.0700 if it slips below 1.0750. Meanwhile, the 200-day EMA near 1.0900, and the psychological figure of 1.1000, emerge as key resistances.

• EUR/USD may return to the descending channel pattern as bearish bias is still in play.
• The nine-day Exponential Moving Average (EMA) is below the 14-day EMA, suggesting an ongoing bearish bias for the pair.
• The pair finds support at a psychological level of 1.0800, aligned with the upper boundary of the descending channel.

EUR/USD retraces its recent gains from the previous session, trading around 1.0810 during the Asian hours on Tuesday. A review of the daily chart shows that the pair tests the upper boundary to return to the descending channel pattern. which could reinforce a bearish bias for the pair.

The 14-day Relative Strength Index (RSI), a key momentum indicator, is slightly above the 30 level. A drop below this threshold would indicate an oversold condition, suggesting the possibility of an upward correction for the EUR/USD pair in the near future.

Additionally, the nine-day Exponential Moving Average (EMA) is below the 14-day EMA, confirming the prevailing bearish trend in the EUR/USD pair’s price. The short-term price momentum is weaker, which could mean that the price is likely to continue experiencing downward pressure.

On the downside, the immediate support level appears to be at a psychological level of 1.0800, which coincides with the upper boundary of the descending channel. If the price falls back within this channel, it could increase the likelihood of a decline toward the psychological level of 1.0600.

A break below the 1.0600 level would likely heighten selling pressure, pushing the EUR/USD pair further down to test the lower boundary of the descending channel, estimated at around 1.0680.

In terms of resistance, the EUR/USD pair may encounter an immediate barrier around the nine-day Exponential Moving Average (EMA) at the 1.0826 level, followed by the 14-day EMA at the 1.0855 level. A breakthrough above these EMAs could lead the pair to approach the psychological level of 1.0900.

EUR/USD: Daily Chart

• EUR/USD trades flat near 1.0810 in Tuesday’s early Asian session. 
• The rising bets that the Fed might not opt into aggressive easing might boost the USD. 
• ECB’s Wunsch said there is no urgency for the ECB to speed up policy easing. 

The EUR/USD pair holds steady around 1.0810 on the consolidation of the US Dollar (USD) during the early Asian session on Tuesday. Investors await Germany’s GfK Consumer Confidence data, which is due later on Tuesday. 

The rising expectation of a slower pace of US Federal Reserve (Fed) rate cuts is likely to support the Greenback in the near term. Nonetheless, market players will take more cues from the key US economic data this week, including the advanced  Gross Domestic Product (GDP) for the third quarter (Q3), ISM Manufacturing PMI, inflation and employment data. 

Meanwhile, traders will closely monitor the US presidential election on November 5. According to polling site FiveThirtyEight, Trump's possibility of winning the US election has increased to 52% compared to 48% for Vice President Kamala Harris. The uncertainty surrounding this key event might lift the safe-haven currency like the USD against the Euro (EUR). 

The European Central Bank (ECB) policymakers have had different views on monetary policy in the previous days. Belgian central bank chief Pierre Wunsch said on Monday that there is no urgency for the central bank to cut interest rates quicker, and it could even live with a small. The less dovish comments from ECB Governor Wunsch help limit the shared currency’s losses. However, the Portuguese central bank chief, Mario Centeno, stated that a 50 basis points (bps) rate cut should be among the options on the table in December. 

Scotiabank’s Chief FX Strategist Shaun Osborne noted, “Comments from ECB Governor Wunsch, adding to the raft of voices who have spoken out against upping the pace of rate cuts recently, helped nudge the EUR higher. Moody’s put French debt on negative outlook Friday.”

EUR/USD dropped back to the upper 1.07s in early Asian trade before crawling back to the low 1.08s, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

EUR edges higher

“Comments from ECB Governor Wunsch, adding to the raft of voices who have spoken out against upping the pace of rates cuts recently, helped nudge the EUR higher. Moody’s put French debt on negative outlook Friday.”

“OATs are, however, outperforming marginally in the day, with the outlook revision no great surprise and markets perhaps relieved that – for now, at least – a rating cut was avoided.”

“Spot is consolidating in a developing range around 1.08. The pattern of trade so far suggests a minor pause in the EUR’s decline before losses resume (potential bear flag pattern). The EUR remains heavily oversold on the intraday and daily oscillator studies which does raise the risk of a short squeeze at some point, however. Support is 1.0780. Resistance is 1.0870.”

Consolidating Euro (EUR) continued to trade near recent lows amid broad USD strength and somewhat dovish ECB-speaks. EUR was last seen at 1.0812, OCBC’s FX analysts Frances Cheung and Christopher Wong note.

Momentum remains bearish

“Vasle said that ECB should not hurry to lower rates or spend too long contemplating how far and how quickly they should fall. Vujcic said that he is open to any discussion in Dec. Simkus wants rate cut but cannot justify 50bp move.”

“Knot said that given the downward surprise of both headline and core CPI in 3Q, inflation may drop faster than expected. He also added that data point to increasing risk of disappointing growth in the near and medium term.”

Momentum remains bearish though there are signs of it fading while RSI is still near oversold conditions. Support 1.0780, 1.0740 (76.4% fibo). Resistance at 1.0830 (61.8% fibo retracement of 2024 low to high), 1.0870 (200 DMA), 1.0910/30 levels (21, 100 DMAs).