EUR/USD eyes further gains past 1.0300 as US Dollar retreats ahead of FOMC Minutes
- EUR/USD picks up bids to defend the previous day’s recovery moves.
- US Dollar remains pressured despite mixed sentiment in the market, absence of bond moves.
- Buyers seek confirmation of Fed’s 50 bps rate hike in December.
- Flash PMIs, US Durable Goods Orders and risk catalysts are extra catalysts to watch for fresh impulses.
EUR/USD remains mildly bid near 1.0320 as it cheers the US Dollar weakness during early Wednesday morning in Europe. That said, the quote’s latest upside, however, appears shallow ahead of the key data/events.
US Dollar Index (DXY) prints a two-day downtrend around 107.00, down 0.10% intraday by the press time, as sluggish US Treasury yields challenge the greenback buyers.
It’s worth noting that a holiday in Japan restricts the US bond moves in Asia. Additionally challenging the DXY bulls are mixed updates surrounding China’s Covid conditions and fears of economic slowdown in the bloc, mainly due to the bloc’s readiness to cap Russian Oil prices and Moscow’s threat to pause gas supplies via Ukraine.
Although China reports a further rise in the daily COVID-19 numbers, the death toll returns to zero, after a quick uptick to two, which in turn keeps the traders hopeful that the dragon nation could tackle the virus woes this time. Also likely to keep the pair buyers hopeful are hopes of easy activity numbers from the United States, as well as the recently mixed comments from the US Federal Reserve (Fed) policymakers versus hawkish remarks from the European Central Bank (ECB) officials.
Amid these plays, S&P 500 Future remains directionless while the 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, keeps the EUR/USD sellers hopeful. Hence, traders will pay close attention to today’s flash readings of November’s activity numbers for the initial directions before the US Durable Goods Order for October and the Federal Open Market Committee (FOMC) Meeting Minutes could offer clear signals.
Technical analysis
A convergence of the 10-DMA and a one-week-old descending trend line restricts immediate EUR/USD upside near 1.0320, a break of which could quickly propel the quote towards the 200-DMA hurdle surrounding 1.0400. Alternatively, pullback moves remain elusive until the quote stays beyond the previous resistance line from early October, around 1.0200 by the press time.