EUR/USD picks up, Dollar dips with US consumer sentiment data on focus

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EUR/USD picks up, Dollar dips with US consumer sentiment data on focus

The Euro is testing levels above 1.1550 after bouncing at the 1.1530 area.
Risk aversion, US data blackout, and mixed Eurozone figures have led to a choppy trading week.
The EUR/USD needs to breach the 1.1550 resistance area to confirm a trend shift

EUR/USD has retraced previous losses during Friday's European session and returned to 1.1550 at the time of writing after bottoming at 1.1530 earlier on the day. Markets, however, are lacking a clear direction, and the pair is on track for a flat weekly performance, with Eurozone data showing mixed figures and investors flying blind due to the ongoing blackout of official US data.

The US Dollar Index (DXY), which measures the value of the USD against a basket of six majors, has given away gains, turning negative on daily charts, which is providing some support to the common currency. Investors, however, remain wary of risk following another sell-off on Wall Street on Thursday, which might weigh on EUR/USD rallies.

On Thursday, a private employment report revealed that net employment declined in the US in October, offsetting the moderate enthusiasm seen after Wednesday's ADP data release and feeding hopes of a Federal Reserve (Fed) rate cut in December. The US Dollar extended its pullback from three-month highs.

On Friday's calendar, the focus will be on European Central Bank (ECB) and Fed speakers, ahead of the Michigan Consumer Sentiment Index, as the US government shutdown will delay the key Nonfarm Payrolls (NFP) report for the second consecutive month.

Euro Price Today

The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the New Zealand Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.04%	0.21%	0.09%	-0.01%	0.02%	0.39%	0.02%
EUR	0.04%		0.25%	0.16%	0.02%	0.05%	0.42%	0.06%
GBP	-0.21%	-0.25%		-0.12%	-0.25%	-0.20%	0.18%	-0.19%
JPY	-0.09%	-0.16%	0.12%		-0.08%	-0.06%	0.29%	-0.06%
CAD	0.01%	-0.02%	0.25%	0.08%		0.02%	0.37%	0.03%
AUD	-0.02%	-0.05%	0.20%	0.06%	-0.02%		0.38%	0.03%
NZD	-0.39%	-0.42%	-0.18%	-0.29%	-0.37%	-0.38%		-0.36%
CHF	-0.02%	-0.06%	0.19%	0.06%	-0.03%	-0.03%	0.36%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).

Daily digest market movers: Choppy trading amid cautious markets

Investors' fears about an overvaluation of AI-related fears are bringing memories of the dotcom crash and have sent equity markets tumbling across the board. Risk-aversion boosted the US Dollar earlier on Monday, but the absence of official US Data is keeping limiting the US Dollar's rallies, leaving most pairs in no man's land.
A report by Revelio Public Labor Statistics showed that net employment declined by 9,100 in October, with public sector jobs dropping from 22,000. Apart from that, cost-cutting and the adoption of artificial intelligence have increased plans for further layoffs.
These figures boosted hopes of another Fed interest-rate cut in December. The CME Fed Watch Tool shows that chances of a quarter-point cut in December increased to 67% from 62% on Thursday. Still, these are below the levels above 90% seen ahead of last week's Fed meeting.
Chicago Fed President Austan Goolsbee cooled those hopes, showing hesitation about easing monetary policy further in the absence of key inflation data amid the US government shutdown.
In Europe, an unexpected contraction in Retail Sales in September offset the optimism after the upbeat services sector activity figures released earlier in the week and acted as headwind for the Euro recovery.
Data released by Destatis on Friday has shown that the German trade surplus narrowed to EUR 15.3 billion in September, well below the EUR 16.8 billion expected after a downwardly revised EUR 16.9 billion surplus in August. The rise in exports has been offset by a larger increase in imports.

Technical Analysis: EUR/USD must break 1.1550 to confirm a trend shift

The EUR/USD has resumed the upside trend from three-month lows and has pierced a key resistance in the 1.1545-1.1550 area (October 14, 30 lows). Technical indicators are showing an increasing bullish momentum, although the fundamental background, with risk-aversion prevailing, is not the best context for a sharp Euro recovery

Thursday's impulsive rebound suggests that negative momentum might be easing. Still, Euro bulls should confirm above 1.1550 to signal a trend shift and set their target at 1.1580 (October 22, 23 lows) ahead of 1.1635, the October 30 high.

Meanwhile, downside attempts are limited at the 1.1530 area. Further down, the pair might find some support at 1.1500 and then at the November 5 low around 1.1470. The measured target of the broken triangle pattern, which meets the price at the 261.8% Fibonacci retracement of the late October rally, is near 1.1440.

Economic Indicator

Michigan Consumer Sentiment Index

The Michigan Consumer Sentiment Index, released on a monthly basis by the University of Michigan, is a survey gauging sentiment among consumers in the United States. The questions cover three broad areas: personal finances, business conditions and buying conditions. The data shows a picture of whether or not consumers are willing to spend money, a key factor as consumer spending is a major driver of the US economy. The University of Michigan survey has proven to be an accurate indicator of the future course of the US economy. The survey publishes a preliminary, mid-month reading and a final print at the end of the month. Generally, a high reading is bullish for the US Dollar (USD), while a low reading is bearish.

Why it matters to traders?

Consumer exuberance can translate into greater spending and faster economic growth, implying a stronger labor market and a potential pick-up in inflation, helping turn the Fed hawkish. This survey’s popularity among analysts (mentioned more frequently than CB Consumer Confidence) is justified because the data here includes interviews conducted up to a day or two before the official release, making it a timely measure of consumer mood, but foremost because it gauges consumer attitudes on financial and income situations. Actual figures beating consensus tend to be USD bullish.

Economic Indicator

Michigan Consumer Expectations Index

The University of Michigan's Inflation Expectations gauge captures how much consumers anticipate prices will change over the coming 12 months. It comes out in two rounds—a preliminary release that tends to pack a bigger punch, followed by a revised update two weeks later.