Traders are buying the European currencies today!
Will EUR/USD see a longer-term reversal? Or is the pair just pulling back from its recent sharp losses?
Before moving on, ICYMI, yesterday’s watchlist checked out NZD/USD’s support zone ahead of the RBNZ’s policy decision. Be sure to check out if it’s still a good play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
JOLTs U.S. Job Openings: 9.61M (8.6M forecast; 8.92M previous)
Kevin McCarthy ousted as U.S. House Speaker in a historic House Vote
As expected, the RBNZ kept its interest rates steady at 5.50% in October
Spain’s HCOB services PMI improved from 49.2 to 50.5 in September
Italy’s HCOB services PMI almost unchanged, up from 49.8 to 49.9 in September
France’s HCOB services PMI adjusted from 43.9 to 44.4, still the fastest decline since November 2020
Germany’s HCOB services PMI revised higher from 49.8 to 50.3
Eurozone’s HCOB services PMI adjusted slightly higher from 48.4 to 48.7 in September
Price Action News
The New Zealand dollar encountered a fresh batch of sellers today after the Reserve Bank of New Zealand kept its interest rates steady at 5.50% for another month in October.
RBNZ’s no-change decision was widely expected but it seems like the lack of additional hawkish remarks inspired a bit of profit-taking among the NZD pairs.
It also didn’t help that the Asian and early European session traders took their cues from the risk aversion and the selloffs from the previous U.S. session.
As of writing, NZD is weakest against AUD, GBP, and CHF and is clocking in the least losses against JPY, USD, and CAD.
Upcoming Potential Catalysts on the Economic Calendar:
U.S. ADP report at 12:15 pm GMT
U.S. ISM services PMI at 2:00 pm GMT
U.S. crude oil inventories at 2:30 pm GMT
ECB President Lagarde to give a speech at 4:00 pm GMT
Australia’s trade balance at 12:30 am GMT (Oct 5)
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
EUR/USD: 15-min
In case you missed it, a round of better-than-expected PMI readings from the Eurozone and the U.K. are attracting buyers for currencies like EUR, GBP, and CHF.
EUR/USD, in particular, has jumped from its 1.0460 lows to trade closer to the 1.0500 psychological handle.
Are the bulls done buying for the day? Notice that EUR/USD is now trading at the R1 (1.0490) Pivot Point level in the 15-minute time frame. That’s about where the pair found support last week!
Today’s U.S. ADP and ISM services PMI reports might provide clues on how high EUR/USD can fly. The reports are expected to print lower numbers compared to last month’s results.
If the reports print on the weaker side, or if traders pull back a bit from their USD-buying, then EUR/USD may hit higher resistance levels or make a play for the trend line resistance.
We may even see an upside breakout if EUR sustains its bullish momentum!
But if EUR/USD encounters resistance around its current levels, or if the pro-EUR momentum runs out, then EUR/USD could turn lower and revisit its weekly lows.
Watch this one closely, errbody!
