- EUR/USD looks volatile amidst increasing US political uncertainty.
- EMU, German Services PMI surprised to the upside in October.
- Global markets remain focused on US elections results.
The single currency resumes the downside and drags EUR/USD to the 1.1670 region at the time of writing on Wednesday.
EUR/USD stays focused on US elections results
EUR/USD fades the initial uptick to monthly highs in the 1.1770 area and returns to the 1.1670/80 band in response to a better mood in the dollar and following a negative start of the session in the European stock markets.
In the meantime, the US elections results are expected to dictate the price action in the pair in the very near-term ahead of the FOMC meeting on Thursday and key data releases in the US calendar at the end of the week.
In the euro calendar, final October Services PMI came in above the preliminary readings in both Germany and the broader Euroland. Later in the session, September’s Producer Prices are due in the euro bloc along with the speech by ECB’s I.Schnabel.
Across the pond and apart from the US elections results, the ADP report is due seconded by Balance of Trade figures, weekly Mortgage Applications, the ISM Non-Manufacturing and the EIA’s report.
What to look for around EUR
EUR/USD manages to pick up pace and visited the 1.1770 region earlier in the session, just to give back those gains soon afterwards and slip back to the sub-1.1700 zone. In the very near-term, EUR/USD is expected to remain under scrutiny on USD-dynamics mainly coming from the elections, the FOMC gathering (Thursday) and the Nonfarm Payrolls (Friday). On the more domestic front, the euro appears propped up by auspicious results from domestic fundamentals (despite momentum appears somewhat mitigated in several regions), although the now more dovish stance from the ECB prompts some caution when comes to bullish attempts. As usual, the euro still looks supported by the solid position of the EMU’s current account.
EUR/USD levels to watch
At the moment, the pair is down 0.33% at 1.1672 and faces the next down barrier at 1.1622 (monthly low Nov.2) followed by 1.1612 (monthly low Sep.25) and finally 1.1495 (monthly high Mar.9). On the flip side, a breakout of 1.1771 (monthly high Nov.3) would target 1.1880 (monthly high Oct.21) en route to 1.1917 (high Sep.10).
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