EUR/USD Takes a Breather Ahead of U.S. CPI Data
2022.11.09 12:55
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The pair is taking a breather on Wednesday, consolidating the previous weekly gain at the 1.0050 area after a three-day rally that saw the pair accumulating over 300 pips.
The euro reached a two-month high of 1.0096 against the dollar on Tuesday as the U.S. currency weakened, weighed by a pullback in Treasury yields, while American citizens went to the polls for the midterm elections.
At the time of writing, the EUR/US pair is trading at the 1.0055 zone, slightly below its opening price but over 3% above last week’s lows before the U.S. data.
Recent USD weakness comes on the back of expectations of a Fed pivot – slowing down the pace of tightening after four consecutive meetings hiking 75 bps.
Focus now turns to October’s , which will be released on Thursday and could trigger directional moves in the EUR/USD as investors await the outcome of the midterm elections.
Ahead of the results, which could take weeks, polls point to a majority of Republicans in the House of Representatives and a close call in the Senate.
From a technical perspective, the EUR/USD pair retains the short-term bullish bias according to indicators on the daily chart. At the same time, the price accomplished a daily close above the 100-day SMA, which is a positive signal.
If the pair breaks above the 1.0100 area, the next bullish targets are at 1.0197, September monthly high, and 1.0368, August monthly high. On the other hand, a loss of the 1.0030 area would expose the 20-day SMA at 0.9900 and risk a retest of last week’s lows at the 0.9730 area.
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