Dear ,
As requested, let’s look at EURUSD and the recent events that happened in the previous trading session.
EURUSD Analysis
| Performance after Thursday | |||||
| Period | Pct | Chg | Momentum | ||
| Thursday | -0.11% | -11.5 Pips |  |
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| Week to-date | -2.12% | -236.8 Pips | |
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| October | -1.83% | -203.6 Pips |  |
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Upcoming key events (London Time)
Fri 01:30 PM USD Producer Price Index (12-mth)
What happened lately
In the United States, the Consumer Price Index (CPI) observed a minimal rise of 0.2% on a seasonally adjusted basis for September, continuing the same trend seen in August and July, as reported by the U.S. Bureau of Labor Statistics. Over the past year, the all items index for inflation only rose by 2.4%, marking the smallest 12-month increase since February 2021. This indicates that inflation is stabilizing, suggesting a cooling down in the costs faced by consumers and possibly affecting the Federal Reserve’s future decisions regarding interest rates.
In Germany, the trade balance for August increased significantly to €22.5 billion from €16.8 billion the previous month, according to data from Destatis. This jump suggests a strong export volume or a reduction in imports, supporting the economy and indicating a bullish trend for the eurozone’s largest economy. Such a robust trade balance may help sustain the German economy, which is pivotal for the overall eurozone stability.
The EUR/USD exchange rate fell by 0.11% to 1.09330 on Thursday. The U.S. inflation data showing moderate CPI growth may have inversely impacted the euro’s position against the dollar, as lower inflation growth reduces pressure on the Federal Reserve to hike interest rates. This potentially makes the dollar relatively less attractive, but the euro’s gain is restrained possibly by its own economic challenges, despite Germany’s favorable trade balance data. Looking forward, upcoming U.S. Producer Price Index data might offer further insights into inflation trends, impacting investor sentiment and influencing the EUR/USD dynamics. A higher-than-expected PPI may boost the dollar if it suggests inflationary pressure and expectations of future Fed rate hikes, whereas lower PPI numbers could favor the euro. These economic indicators play a crucial role in shaping near-term market expectations and movements in the EUR/USD currency pair.
What can we expect from EURUSD today?
EURUSD on Thursday dropped -0.11% to 1.09330. Price is below 9-Day EMA while Stochastic is falling in oversold zone.
Updated daily direction for EURUSD looks bearish as the pair posted lower in Thursday trading session.
Looking ahead for the day, immediate support level is at S1 1.09036 with break below could see further selling pressure towards S2 at 1.08742. To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 1.09548 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 1.08998 would indicate selling pressure.
For the week to-date, take note that EURUSD is bearish as the pair posted lower by -2.12%.
Key levels to watch out:
| R3 | 1.10136 |
| R2 | 1.09842 |
| R1 | 1.09586 |
| Daily Pivot | 1.09292 |
| S1 | 1.09036 |
| S2 | 1.08742 |
| S3 | 1.08486 |
