The unchanged inflation in the Eurozone, as expected, and the return of the USD strength, is pushing the dollar’s index to 93.51 DXY. This is with continuing with the bearish pressure on the EUR/JPY pushing it to support at 1.1735 before settling around 1.1760 at the time of writing.
Corrective moves of the EUR/USD after it gains towards 1.1880 last week, with the return of the USD strength and the absorption of the US inflation data, came below expectations, as there is still a chance to raise interest rates before end of year.
The US stock markets continues achieving record highs, and the Dow Jones is about to achieve a new record at 23.000. The German ZEW index of trust reading was lower than expected, as it remained as is in the Eurozone.
The Euro's recent gains was due to optimism during the Catalonian independence delay, as well as more hawkish police of the ECB, and the recent pressure on the dollar due to contrast employment jobs, and what was mentioned in the last Fed’s minutes of meeting, all of which helped support more gains for the EUR/USD, as the minutes of meeting showed a split among members around the path of increasing interest rates in light of current inflation levels in the country which are still far from the 2% target.
The US job data results, which were disappointing, with the exception of a strong bounce of the wages in the country and the lower unemployment rates, with all analysis suggesting that the negative affect of the hurricanes which hit the country recently, leading to weak US jobs creation for the first time in 7 years. Today, housing data will be released from the US.
Technically: The EUR/USD will be strongly bearish in case of a move towards support areas at 1.1600 and 1.1700. The upward chance will be standing in case it is established somewhere above 1.1800 and 1.1885, because that would support the movement towards the psychological peak of 1.2000.
On the economic data front: Economic Agenda today shows that the pair is monitoring the release of the US housing data, as well as the oil inventories. There will be comments from fed members. The pair will continue moving based on market sentiment, with variance in monetary policies between the Federal Reserve and the ECB.
