EURUSD rises to weekly highs

EURUSD rises to weekly highs near 1.1770, ahead of crucial Eurozone data. EURUSD benefited from FOMC-led broad USD weakness and trade concerns. Markets are waiting for inflation and growth figures from the eurozone for new trading momentum.

31 October 2019, AtoZMarkets – EURUSD extends bullish momentum on the fourth day on Thursday. It is mainly benefiting from broad-based US dollar weakness, as the latest US Federal Reserve (Fed) rate cuts continue to weigh on the greenback and Treasury yields.

EURUSD Fundamental Analysis – 31 October 2019

The Fed has kept its promise of a much-needed 25-bps rate cut in the US last session. But there is a pause in future rate cuts. Despite the Fed’s hawkish Fed rate cut and Fed Powell’s optimistic remarks about the US economy, the US dollar depreciated in all sectors after soaring prices. And markets remained concerned about the impact of the rate cuts on the economy and looming trade risks between the United States and China.

EUR / USD weekly highs

Eurozone data – Key event risks ahead

That was reflected by the sell interest around Treasury yields and the spread of overnight losses on the greenback versus its major peers as move towards European opening bells.

At the same time, on the euro side of the equation, the continuation of the spot hike remains dependent on the forthcoming publication of the Eurozone flash CPIs and GDP, expected later today. The annualized Eurozone Q3 Preliminary GDP number is seen down to 1.1% from 1.2% in the previous. But quarterly, data is seen arriving at 0.1% in the third quarter compared to 0.2% last. Inflation figures are slightly lower in October.

As per our assumption, Eurozone data could dampen the upward momentum in major and bring rates below the 1.1150 level. However, bulls are likely to attempt the handle of 1.12 again on a positive surprise.

In the future, EURUSD prices could also remain at the mercy of the dynamics of the USD. That is heading into the publication of the leading US macro. And in the context of the trade agreement between the United States and China continues to cause concern.

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