Eur/Usd stabilizes as dollar rally takes a breather
Press Hub UCapital
Share:
The EUR/USD pair finds support near 1.0590 early Tuesday as the US Dollar rally pauses following post-election strength. After testing the critical 1.0500 support last week, the euro makes modest gains, buoyed by a temporary reprieve in dollar momentum and expectations for eurozone inflation data. However, the greenback retains the upper hand, fueled by rising inflationary expectations in the US and solid Treasury yields.
Euro attempts recovery amid dollar consolidation
The EUR/USD pair managed to rebound from its one-year low under 1.0550, hovering closer to 1.0600. Monday's slight recovery aligns with a broader pause in the US Dollar’s post-election rally, giving the euro room to stabilize.
Eurozone inflation data due later this week will play a pivotal role in shaping expectations for the European Central Bank’s (ECB) next rate move. Analysts anticipate headline inflation to remain flat at 2% for October, offering limited support for hawkish ECB action.
Technical outlook: key levels for Eur/Usd
Resistance Levels:
Immediate resistance lies at the 1.0600 mark, coinciding with the 23.6% Fibonacci retracement of the recent swing lower. The next hurdle is the 200-hour moving average (1.0633), which must be cleared for the pair to challenge higher levels.
Support Levels:
Key support remains at 1.0500, a critical psychological and technical zone. A sustained break below this level could accelerate the bearish trend toward new lows.
Broader dollar dynamics remain favorable
The US Dollar maintains a strong position, having gained over 3% against the euro since the November 5 election. Market optimism around President-elect Donald Trump’s policies, including higher tariffs and lower taxes, continues to support the greenback.
Treasury yields have stabilized after recent gains, reflecting investor confidence in a resilient US economy and limited Federal Reserve rate cuts. As inflation expectations rise, the Dollar’s strength may cap any significant recovery in EUR/USD.
The EUR/USD pair attempts to reclaim 1.0600 as dollar momentum slows, but the greenback’s broader strength and economic fundamentals suggest limited upside for the euro. Traders will closely monitor eurozone inflation data and US market dynamics for further directional cues. A sustained break above 1.0633 is needed to shift near-term bias, while 1.0500 remains critical support for bulls to defend.
Euro attempts recovery amid dollar consolidation
The EUR/USD pair managed to rebound from its one-year low under 1.0550, hovering closer to 1.0600. Monday's slight recovery aligns with a broader pause in the US Dollar’s post-election rally, giving the euro room to stabilize.
Eurozone inflation data due later this week will play a pivotal role in shaping expectations for the European Central Bank’s (ECB) next rate move. Analysts anticipate headline inflation to remain flat at 2% for October, offering limited support for hawkish ECB action.
Technical outlook: key levels for Eur/Usd
Resistance Levels:
Immediate resistance lies at the 1.0600 mark, coinciding with the 23.6% Fibonacci retracement of the recent swing lower. The next hurdle is the 200-hour moving average (1.0633), which must be cleared for the pair to challenge higher levels.
Support Levels:
Key support remains at 1.0500, a critical psychological and technical zone. A sustained break below this level could accelerate the bearish trend toward new lows.
Broader dollar dynamics remain favorable
The US Dollar maintains a strong position, having gained over 3% against the euro since the November 5 election. Market optimism around President-elect Donald Trump’s policies, including higher tariffs and lower taxes, continues to support the greenback.
Treasury yields have stabilized after recent gains, reflecting investor confidence in a resilient US economy and limited Federal Reserve rate cuts. As inflation expectations rise, the Dollar’s strength may cap any significant recovery in EUR/USD.
The EUR/USD pair attempts to reclaim 1.0600 as dollar momentum slows, but the greenback’s broader strength and economic fundamentals suggest limited upside for the euro. Traders will closely monitor eurozone inflation data and US market dynamics for further directional cues. A sustained break above 1.0633 is needed to shift near-term bias, while 1.0500 remains critical support for bulls to defend.