Daily Price Outlook
The EUR/USD coin extended its early-day bullish bias and climbed back to the intra-day high around the 1.1292 level as the currency pair cheered the US dollar's weakness amid a lack of significant data events. Furthermore, the market's reaction to new inflation fears raised by European Central Bank (ECB) officials could also be linked to the pair's bullish run-up. Meanwhile, falling fears over a South African COVID version known as Omicron helped keep EUR/USD prices bid.
The EUR/USD currency pair, on the other hand, benefited further from the market's bullish sentiment, which was bolstered for several reasons. First, as indicated by the 10-year breakeven inflation rate from the St. Louis Federal Reserve (FRED) data, the recovery in US inflation expectations is challenging EUR/USD bulls. Meanwhile, for October, the dismal German factory orders were down 6.9% m/m versus +1.8 percent previously capped the EUR/USD pair's upside momentum. The EUR/USD currency is currently trading at 1.1290 and consolidating in the range between 1.1276 and 1.1293.
Despite a lack of large data/events, the market appears to be upbeat due to a lack of prominent virus-related deaths and anticipation of discovering a cure for the COVID-19 strain, especially after China and Australia catalysts are out. The news that Omicron patients had very mild symptoms helped to calm the global risk sentiment. This alleviated concerns about the new coronavirus's economic consequences and restored investor confidence, as seen by a positive tone in the equity markets.
Furthermore, the Reserve Ratio Requirement (RRR) activities of the People's Bank of China (PBOC) and Japan's willingness to record stimulus also played a major role in supporting the market's trading sentiment. As a result, the EUR/USD prices benefit from the risk-on market, but the recent rise in US inflation expectations, as indicated by the 10-year breakeven inflation rate from the St. Louis Federal Reserve (FRED) data, adds to the pressure on the pair's prices.
Elsewhere, the subdued US dollar price action was also seen as one of the key factors that helped the EUR/USD currency pair stay bid. The broad-based US dollar failed to extend its early-day gains and lost some of its traction as the market's upbeat mood tends to undermine the safe-haven dollar. Even though there is still much ambiguity about Omicron's health and economic implications, investors have welcomed news from South Africa that a large wave of hospitalizations has not accompanied the exponential growth in Omicron infections. Thus, the US dollar's bearish bias keeps the EUR/USD pair up.
Moving forward, the second reading of the Eurozone Q3 GDP, as well as October's ZEW sentiment data for the bloc and Germany, will be critical for the EUR/USD prediction in the immediate term. Meanwhile, the lack of essential data or events could limit market swings, at least until Friday's release of the US Consumer Price Index (CPI). Following that, the Federal Reserve's meeting next week will also be key to follow.
EUR/USD Intraday Technical Levels
Pivot Point: 1.1287
EUR/USD - Technical Outlook
On Tuesday, the EUR/USD is trading choppy at 1.1287 level, tossing in between a symmetrical triangle pattern. On the 4-hour timeframe, the EUR/USD is gaining immediate support at the 1.1287 level and resistance at 1.1308.
A break below the 1.1287 pivot point exposes the EUR/USD price to the 1.1263 and 1.1240 levels. Alternatively, the break above 1.1308 exposes the pair towards the 1.1331 or 1.1352 level. The RSI and Stoch RSI are still below 50, demonstrating a selling trend. The bullish bias dominates over the 1.1280 level and vice versa; all the best!
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