EUR/USD rises amid escalating Middle East conflict and lower US bond yields
- EUR/USD climbs for the third straight day, trading above 1.0600 after a daily low of 1.0571.
- US equity markets recover some losses, while lower US bond yields at 4.84% undermine the Greenback.
- Upcoming economic data includes the US Q3 GDP, core PCE, and the ECB’s monetary policy decision.
EUR/USD climbs for the third straight day, even though the Middle East conflict continues to escalate, as troops of the United States (US) were attacked on Syria, while Israel halts its ground offensive amid efforts of diplomacy. The major trades above the 1.0600 figure after hitting a daily low of 1.0571, gaining 0.52%.
EUR/USD gains 0.52%, trading above 1.0600, risk appetite
Market sentiment shifted optimistic during Monday’s session amid the escalation of the Israel – Hamas conflict. US equity markets reversed some of last week’s losses, while lower US bond yields undermined the Greenback. The US 10-year Treasury bond yield is at 4.84%, down seven basis points, while the US Dollar Index (DXY) slumps 0.47%, at 105.66.
The US economic docket is light, as Federal Reserve (Fed) officials entered its blackout period. Most of the policymakers struck the markets with a neutral tone, with market players expecting the Fed to keep rates unchanged at the November 1 monetary policy decision. Aside from that, the September Chicago Fed National Activity Index came at 0.02%, above August’s -0.22%. Up next the calendar would reveal the preliminary reading of the third quarter Gross Domestic Product (GDP), along with the Fed’s preferred gauge for inflation, the core PCE.
On the Eurozone (EU) front, the docket would feature Flash PMIs and the European Central Bank (ECB) monetary policy decision, with growing speculation the Fed would keep rates unchanged. After that, the ECB’s President Christine Lagarde Press Conference, would be the highlight following the bank’s meeting.
EUR/USD Price Analysis: Technical outlook
With the EUR/USD reaching a new cycle high at around 1.0649, buyers would likely test in the near term the 1.07 handle, though they would face solid resistance at the 50-day moving average (DMA) at 1.0683. A breach of the latter would expose the former, and the next resistance would emerge at the September 20 high at 1.0736. Conversely, if the pair falls below the October 12 high of 1.0639, that could open the door to challenge 1.0600. If sellers move in, they could drive the price towards the latest swing low of 1.0495.