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 | -0.34% | -36.8 Pips |  |
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| Week to-date | -0.89% | -97.4 Pips | |
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| October | -2.77% | -308.6 Pips |  |
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Upcoming key events (London Time)
No major events for the day.
What happened lately
In the United States, recent economic data indicates a positive trend. The U.S. Monthly Retail Trade between August and September experienced an upswing; excluding automobiles, it increased from 0.1% to 0.5%. Including all goods, the retail trade rose from 0.1% to 0.4%, according to data from the Census Bureau. Additionally, the U.S. Manufacturing Business Outlook Survey for October improved significantly, rising to 10.3 points from 1.7 points in September, as reported by the Philadelphia Fed. These figures suggest robust consumer spending and stronger manufacturing sentiments, which could be critical in supporting the economic recovery. Furthermore, initial unemployment insurance claims saw a reduction for the week ending October 12, dropping to 241K from the previous figure of 258K, per the U.S. Department of Labor, indicating a healthier labor market outlook.
In the Euro Area, the economic indicators remain stable, albeit with some signs of easing. The European Central Bank lowered the interest rate on main refinancing operations (MRO) from 3.65% to 3.4%. The Euro Area Harmonized Index of Consumer Prices (HICP) for September continues to reflect a deflationary environment, unchanged at -0.1%. The Core HICP remained constant at 0.1%, while on a year-over-year basis, it reflects a stable reading of 2.7%, according to Eurostat. Such figures may emphasize persistent low inflationary pressures in the region, which could support the ECB’s decision to lower interest rates to stimulate economic growth.
The improvement in U.S. economic indicators contrasts with the less dynamic figures in the Euro Area. This divergence might have contributed to a diminished appeal of the euro compared to the dollar, causing the EUR/USD exchange rate to drop by 0.34% to 1.08280 on Thursday. The stronger U.S. retail sales and manufacturing outlook, paired with falling unemployment claims, signal relative economic strength in the United States. On the other hand, gradual monetary easing in the Euro Area, coupled with stagnant inflation data, could pressure the euro. As a result, the current sentiment favors the U.S. dollar over the euro, exerting downward pressure on the EUR/USD pair.
What can we expect from EURUSD today?
EURUSD on Thursday dropped -0.34% to 1.08280. 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 1.08012 with break below could see further selling pressure towards S2 at 1.07743. To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 1.08737 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 1.08106 would indicate selling pressure.
For the week to-date, take note that EURUSD is bearish as the pair posted lower by -0.89%.
Key levels to watch out:
| R3 | 1.09274 |
| R2 | 1.09005 |
| R1 | 1.08643 |
| Daily Pivot | 1.08374 |
| S1 | 1.08012 |
| S2 | 1.07743 |
| S3 | 1.07381 |
