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The EUR/USD down and is presently trading in close proximity to 1.0800. Encountering renewed downward pressure during the Tuesday European session. The resurgence of the US Dollar, driven by broad risk aversion, along with dovish comments from ECB official Schnabel, is exerting a detrimental impact on the pair as it approaches key US economic data releases.
On early Tuesday, the EUR/USD donw and underwent a descent below 1.0820. Breaching a critical juncture where the 200-day Simple Moving Average (SMA) and the Fibonacci 38.2% retracement of the recent uptrend converge. Below this threshold, the psychological support at 1.0800 serves as an initial barrier before entering the range of 1.0760-1.0770. Marked by the Fibonacci 50% retracement and the 200-period SMA on the 4-hour chart.
In the event of a rebound beyond 1.0820, with the establishment of this level as a confirmed support. There may be a deterrent for sellers. Under such circumstances, attention turns to the initial resistance at 1.0860 (20-period SMA). Followed by 1.0900, defined by the Fibonacci 23.6% retracement and the 100-period SMA.
EUR/USD Down to Three-Week Low; US Dollar Resilient Amid Risk-Averse Market
Following a negative close on Monday, the EUR/USD down and extended its descent and reached a three-week low near 1.0800 in the early hours of Tuesday. Unless the pair stabilizes above the 1.0820 level, it remains susceptible to continued interest from technical sellers.
Also Read: AUD/USD Strong Analysis : RBA Statement, USD/JPY Dynamics
The US Dollar (USD) displayed resilience on the first trading day of the week. Driven by a consistent recovery in US Treasury bond yields and a risk-averse market sentiment. Persistent concerns about the Israel-Hamas conflict potentially escalating into a broader Middle East conflict have sustained safe-haven flows. Which in turn influencing financial markets. Currently, US stock index futures indicate a decline ranging between 0.3% and 0.4%.
Key Economic Indicators Awaited: JOLTS Job Openings and ISM Services PMI
Later in the day, the US economic agenda will feature JOLTS Job Openings data for October and the ISM Services PMI for November. A substantial decrease in job openings could pose a challenge to the USD’s capacity to maintain its strength.
Investor attention is also focused on the inflation component of the ISM survey, specifically the Prices Paid Index. An unexpected uptick in this metric could generate demand for the USD.
Nevertheless, unless there is an improvement in risk sentiment later in the day, the EUR/USD may encounter difficulties in regaining traction, even if the data does not favor the USD.
