- EUR/USD stabilized near 1.0550 following Thursday's sharp decline.
- The pair could attract technical buyers if it manages to clear 1.0570.
- Risk perception could drive the USD's valuation ahead of the weekend.
EUR/USD stabilized at around 1.0550 early Friday after posting large losses on Thursday. The technical outlook points to a loss of bullish momentum but buyers could show interest if the pair manages to flip 1.0570 into support.
The renewed US Dollar (USD) strength forced EUR/USD to turn south in the American session on Thursday following the latest inflation figures.
The Consumer Price Index (CPI) in the US rose 3.7% on a yearly basis in September, the US Bureau of Labor Statistics reported. The annual Core CPI inflation, which excludes volatile food and energy prices, edged lower to 4.1% from 4.3% as forecast. Assessing the underlying details of the report, "the Fed's 'supercore' (core services excluding home rent component) jumped 0.6% month-over-month, bringing the most recent three month annualized growth rate to 4.8% from 2.2% in August," said Nathan Janzen, Assistant Chief Economist at Royal Bank of Canada.
Euro price this week
The table below shows the percentage change of Euro (EUR) against listed major currencies this week. Euro was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF | |
| USD | 0.15% | 0.04% | 0.06% | 0.69% | 0.32% | 0.85% | -0.30% | |
| EUR | -0.17% | -0.11% | -0.11% | 0.53% | 0.16% | 0.71% | -0.44% | |
| GBP | -0.03% | 0.12% | 0.03% | 0.62% | 0.29% | 0.79% | -0.32% | |
| CAD | -0.04% | 0.11% | -0.01% | 0.65% | 0.27% | 0.80% | -0.34% | |
| AUD | -0.70% | -0.50% | -0.63% | -0.60% | -0.34% | 0.16% | -0.95% | |
| JPY | -0.33% | -0.17% | -0.29% | -0.25% | 0.32% | 0.49% | -0.62% | |
| NZD | -0.84% | -0.68% | -0.80% | -0.78% | -0.17% | -0.51% | -1.15% | |
| CHF | 0.26% | 0.44% | 0.32% | 0.35% | 0.94% | 0.60% | 1.11% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).
Early Friday, US stock index futures trade modestly higher on the day. In the absence of high-impact macroeconomic data releases, the risk perception could impact the USD's valuation and drive EUR/USD's action ahead of the weekend.
A bullish opening in Wall Street could make it difficult for the USD to find demand. On the other hand, EUR/USD could turn south in case investors continue to price in a stronger probability of one more 25 basis points Federal Reserve rate hike before the end of the year.
EUR/USD Technical Analysis
EUR/USD dropped below 1.0570 (100-period Simple Moving Average (SMA), Fibonacci 23.6% retracement of the latest downtrend) and the Relative Strength Index (RSI) indicator on the 4-hour chart fell below 50, reflecting a bearish tilt in the short-term bias.
In case EUR/USD rises above 1.0570 and starts using that level as support, the pair could gather bullish momentum and target 1.0600 (psychological level, static level) and 1.0640-1.0650 (Fibonacci 38.2% retracement, 200-period SMA).
On the downside, supports are located at 1.0500 (psychological level, static level) and 1.0450 (end-point of the latest downtrend) if 1.0570 stays intact.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
EUR/USD stabilizes near 1.0500, looks to post weekly losses
EUR/USD extended its daily decline toward 1.0500 in the second half of the American session, pressured by the souring market mood. Despite the bullish action seen earlier in the week, the pair remains on track to register weekly losses.
GBP/USD falls below 1.2150 as USD rebounds
Following an earlier recovery attempt, GBP/USD turned south and declined below 1.2100 in the second half of the day on Friday. The negative shift seen in risk mood amid rising geopolitical tensions helps the US Dollar outperform its rivals and hurts the pair.
Gold advances to fresh multi-week highs above $1,920
Gold extended its daily rally and climbed above $1,920 for the first time in over two weeks on Friday. Escalating geopolitical tensions ahead of the weekend weigh on T-bond yields and provide a boost to XAU/USD, which remains on track to gain nearly 5% this week.
Bitcoin could be an alternative to US-listed companies but not in the short term
Bitcoin has dipped below $27,000, adding to the subdued cryptocurrency market sentiment. While short-term price concerns persist, analysts predict a rebound based on historical figures.
Nvidia Stock Forecast: NVDA slips as Biden administration attempts to close AI chip loophole
Nvida's stock price opened marginally lower on Friday after Reuters reported that the Biden administration is attempting to close a loophole that allowed Chinese companies access to state-of-the-art computer chips used for AI.