EUR/USD has also added some gains in the European session on Thursday at the US Dollar’s (USD) expense. The US Dollar Index (DXY), which gauges Greenback’s value against six major currencies, corrects slightly to near 104.20 after posting a fresh 12-week high around 104.50 on Wednesday.
However, the near-term outlook of the US Dollar remains firm as investors expect the Federal Reserve (Fed) to follow a more gradual rate-cut approach. Wednesday’s Fed Beige Book showed that the overall business activity was little changed through early October, and there was a slight uptick in hiring with moderate growth in inflationary pressures.
Meanwhile, the uncertainty over the United States (US) presidential election on November 5 has also kept strength in the US Dollar afloat. Market participants worry that the scenario of Trump winning the election will result in higher tariffs, which will have a significant impact on closed trading partners to the US.
Going forward, the next move in the US Dollar will be driven by the preliminary US S&P Global PMI data for October and the Durable Goods Orders data for September, which will be published at 13:45 GMT and on Friday, respectively.
EUR/USD finds temporary support near 1.0760 in European trading hours. However, the outlook of the major currency pair remains downbeat 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) indicator dives below 30.00, indicating a strong bearish momentum. However, a recovery move remains on the cards as conditions turn oversold.
On the downside, the major could see more weakness towards the round-level support of 1.0700 if it slips below the upward-sloping trendline at 1.0750, which is plotted from the October 3 low around 1.0450. Meanwhile, the 200-day EMA near 1.0900, and the psychological figure of 1.1000 will be the key resistance for the pair.
The Composite Purchasing Managers’ Index (PMI), released on a monthly basis by S&P Global and Hamburg Commercial Bank (HCOB), is a leading indicator gauging private-business activity in the Eurozone for both the manufacturing and services sectors. The data is derived from surveys to senior executives. Each response is weighted according to the size of the company and its contribution to total manufacturing or services output accounted for by the sub-sector to which that company belongs. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), industrial production, employment and inflation. The index varies between 0 and 100, with levels of 50.0 signaling no change over the previous month. A reading above 50 indicates that the private economy is generally expanding, a bullish sign for the Euro (EUR). Meanwhile, a reading below 50 signals that activity is generally declining, which is seen as bearish for EUR.
Read more.Last release: Thu Oct 24, 2024 08:00 (Prel)
Frequency: Monthly
Actual: 49.7
Consensus: 49.7
Previous: 49.6
Source: S&P Global
Keep up with the financial markets, know what's happening and what is affecting the markets with our latest market updates. Analyze market movers, trends and build your trading strategies accordingly.