EUR/USD eyes further gains above 1.0300 as US Dollar retreats ahead of FOMC minutes
- EUR/USD is resuming offers to defend yesterday’s recovery moves.
- The US dollar remains under pressure despite mixed sentiment in the market, the absence of bond movements.
- Buyers are asking for confirmation of the Fed’s 50 basis point rate hike in December.
- Flash PMIs, US Durable Goods Orders and Risk Catalysts are additional catalysts to watch for further momentum.
EUR/USD remains slightly bullish near 1.0320 as it encourages US Dollar weakness early Wednesday morning in Europe. That said, however, the latest rise in the rating looks shallow ahead of key data/events.
The US Dollar Index (DXY) is showing a two-day downtrend around 107.00, down 0.10% intraday as of press time, as weak US Treasury yields challenge greenback buyers.
It should be noted that a public holiday in Japan limits the movements of US bonds in Asia. Additionally, DXY bulls are defying mixed updates regarding Covid conditions in China and fears of an economic slowdown in the bloc, mainly due to the bloc’s desire to cap Russian oil prices and the threat of Moscow to suspend the gas supply via Ukraine.
Although China reports a further rise in daily COVID-19 figures, the death toll is back to zero, after a slight increase to two, which in turn keeps traders hoping the dragon nation may recover. tackle the problems of the virus this time. Hopes of easy activity numbers in the United States, as well as recent mixed comments from US Federal Reserve (Fed) policymakers over hawkish remarks from European Central Bank (ECB) officials are also likely to keep the hope of the pair’s buyers.
Amid these plays, the S&P 500 Future remains directionless while stocks in the Asia-Pacific region trade mixed.
It should be noted that the growing uncertainty surrounding the Fed’s next move, especially after the mixed Fedspeak and upbeat US data, is keeping EUR/USD sellers bullish. Therefore, traders will pay close attention to today’s flash readings of November activity numbers for initial directions ahead of the US Durable Goods Order for October and the minutes of the meeting of the Federal Open Market Committee (FOMC) can offer clear signals.
A convergence of the 10-DMA and a week-old descending trend line limits EUR/USD’s immediate rise near 1.0320, a break of which could quickly propel the quote towards the 200- hurdle. DMA around 1.0400. Alternatively, pullback moves remain elusive until the quote stays above the previous resistance line from early October around 1.0200 at press time.