The greenback fell sharply in trading yesterday, not helped by some softer data out of the US. In case you missed it:
Richmond Fed Composite index for September -21 vs. -13 estimateUS Conference Board consumer confidence for September 98.7 vs 104.0 estimate
These aren’t major releases but little by little, it all starts to point to a weaker economic picture in the US. And that sentiment isn’t helped when you get Fed watcher Timiraos coming up with these sort of reports here.
Anyway, EUR/USD is now trading up closer towards the 1.1200 mark again with the high today at 1.1198.
The figure level arrested the run higher in August, so that is a key level to watch on the charts for the remainder of this week. Adding to the technical picture will be key resistance from the 100-month moving average as well, seen at 1.1220 currently. Then, there is also the 2023 high at 1.1275 – which was held back by the 100-month moving average itself and 61.8 Fib retracement of the swing lower from 2021 to 2022 at 1.1275 as well.
Traders might be contemplating an ECB rate cut for next month but the dollar side of the equation has been a tailwind for EUR/USD since the Fed last week. That especially with short-term Treasury yields staying under pressure. 2-year yields have now fallen to 3.52% and that’s the lowest in over two years.
If US economic data continues to support the case for a soft-er landing, that will keep up the dollar pressure for now it would seem.
This article was written by Justin Low at www.forexlive.com.
