On Tuesday, November 9, by the end of the day, EUR/USD fell by 0.05% to 1.1593. Price swings were very impulsive due to the changing sentiment in the EUR/GBP cross pair.
Germany's ZEW economic sentiment index surpassed optimistic estimates, jumping to 31.7 in November from 22.3 in October. The Current Situation Index fell to 12.5 in November from a forecast of 18 and 21.6 in October. In the eurozone, the ZEW economic sentiment index was 25.9 against 21 in October.
ECB Governing Council member Claes Noth said on Tuesday that the conditions for the rate hike are unlikely to be met in 2022.
On Tuesday, the Australian and the New Zealander fell heavily. The AUD/USD pair dropped 0.95% to 0.7361, NZD/USD - 0.9% to 0.7109. There is an opinion that buyers went to the cash in advance of the publication of the inflation report for October in the United States.
Scheduled statistics (GMT +3):
- At 10:00, Germany will publish the consumer price index for October.
- At 12:00, The head of the Bundesbank, Wademan, will deliver a speech.
- At 16:30, MPC member Tenreiro will deliver a speech.
- At 16:30, in the US will be released consumer price index for October, initial claims for unemployment benefits.
- At 18:30, the US Department of Energy will provide data on oil and petroleum product inventories.
- At 22:00, in the United States will be released the monthly budget report for October.
Current situation:
During Asian trading, major currencies went into negative territory. The Australian and New Zealander remain the leaders in decline. Their drop indicates a decrease in risk appetite due to the upcoming US inflation report. Until 16:30, the market may turn into a sideways trend.
The euro may continue to receive support from the cross as the lack of progress on Brexit, coupled with the looming threat of UK entry into force of Article 16, is holding back pound buyers. The protocol keeps Northern Ireland in the EU's single market for goods and allows unhindered trade with the EU. Article 16 allows both parties to unilaterally seek the lifting of certain conditions if they unexpectedly cause harm
Technical analysis:
The EUR/USD pair dropped to 1.1577. The price is trading near the balance line (SMA55). Due to a decrease in risk appetite and higher yields on 10-year bonds, buyers' positions may suffer even more. Support is the level of 1.1570. The EUR/GBP cross remains on the buyer's side after yesterday's rebound from 0.8521.
If the CPI report shows an increase in inflation in October, then we should expect the euro to fall to 1.1555. Sellers may go lower, but it is better to assess the market situation after the release of the report (16:00 GMT +3). It is not yet known how investors and the debt market will perceive it, since the next meeting of the US Federal Reserve will be held on December 13-14.
If buyers hold the defense at 1.1570 until Thursday, conditions will be created for the pair to rise to 1.1645.
Summary: the euro closed slightly higher on Tuesday. The demand for risky assets is low. Aussie and New Zealander are pulling all pairs down in anticipation of the October inflation report in the US. If buyers hold the defense at 1.1570 until Thursday, conditions will be created for the pair to rise to 1.1645.