The weekly rebound in the EUR/USD continues as it returns to the 0.9850 area. The September labor market statistics from Germany pleasantly pleased. The next important item on the euro schedule is the EMU Flash Inflation Rate.
The euro’s prospects are still bright for another session, and on Friday, the EUR/USD pair reaches new highs in the mid-0.9800s.
On Friday, the EUR/USD increases for the third session in a row, extending the recovery from the recent 20-year lows at 0.9530 (September 28), always against the background of the dollar’s continued and robust corrective downturn.
In fact, the continued technical retracement and sharp improvement in the risk complex put more pressure on the dollar, which continues correcting lower and finally gives the pair more legs.
Moving ahead, later in the day, advanced inflation data for the euro region are anticipated to take center stage. The German unemployment rate remained constant at 5.5% in September, according to data released earlier in the day, while the number of unemployed people increased by 14K during that time.
Over in the UK, the conversation will center on the PCE for August, which will be supported by Personal Income/Spending and the final reading of Consumer Sentiment for the current month.
Later in the NA session, the FOMC’s T. Barkin, L. Brainard, L.Mester, J. Williams, and M. Bowman will also speak.
The rising momentum of EUR/USD has already broken over the important 0.9800 barrier and seems to continue uninterrupted for the time being.
Price movement around the euro is anticipated to closely track dollar trends, geopolitical tensions, and the Fed-ECB divergence in the interim. Following the Fed’s most recent rate increase and Powell and the other members of his rate-setting colleagues’ persistently hawkish stance, the latter has become much worse.
Additionally, the growing fears of a regional recession – which seem to be supported by declining mood indicators as well as an impending downturn in certain fundamentals – contribute to the pessimistic outlook for the euro.
This week’s major events in the eurozone include the EU Emergency Energy Meeting, the EMU Flash Inflation Rate, and the change in the unemployment rate in Germany (Friday).
The ECB’s ongoing cycle of rate hikes is one of the pressing concerns on the back burner. happenings in Italy since the elections. Risks of fragmentation exist when the ECB normalizes its monetary policies. Impact of the conflict in Ukraine and the ongoing energy shortage on the prognosis for inflation and growth in the area.
The pair is now up 0.21% at 0.9836, and a break over 0.9853 (the week’s high on September 30) would target 1.0050 (the week’s high on September 20), with 1.0197 being the ultimate goal (monthly high September 12). The subsequent support level, on the other hand, appears at 0.9535 (2022 low September 28), followed by 0.9411 (weekly low June 17 2002), and lastly 0.9386. (weekly low June 10 2002).