[ad_1]
Economists forecast producer prices to increase 0.4% in September (Aug: +0.3%). However, economists predict producer prices to decline by 14.2% year-over-year (Aug: -12.6%).
Euro area car registration numbers for September also warrant consideration. A slide in car registrations would add to the negative outlook for the euro area economy.
Beyond the numbers, ECB commentary may move the dial. ECB Executive Board member Elizabeth McCaul is on the calendar to speak on Friday. Comments favoring a higher-for-longer rate path would support buyer demand.
However, news updates on the Middle East conflict will continue to impact the global financial markets. An escalation in the conflict would fuel demand for the US dollar.
FOMC Members to Conclude a Busy Week for the US Dollar
The Fed pivot away from a rate hike is almost complete. On Thursday, Fed Chair Powell poured ice water on expectations of a Fed interest rate hike. However, Powell left the door ajar for more rate hikes, leaving the onus on FOMC members to close the door.
FOMC members Patrick Harker and Loretta Mester are on the calendar to speak on Friday. Dovish comments on interest rate plans will likely test the buyer appetite for the US dollar.
In recent speeches, Patrick Harker leaned in favor of holding rates unchanged. Loretta Mester must deliver a convincing case to hike rates to impact the EUR/USD.
Short-Term Forecast:
Near-term EUR/USD trends hinge on market sentiment toward the euro area economy and central bank guidance. With the US economy in better shape, the EUR/USD may face strong resistance at $1.06. The Middle East conflict is another consideration.
EUR/USD Price Action
Daily Chart
The EUR/USD sat below the 50-day and 200-day EMAs, affirming bearish price signals.
A EUR/USD break above the $1.06342 resistance level would give the bulls a run at the 50-day EMA.
Better-than-expected German producer prices and dovish Fed comments would support a positive session.
However, an escalation in the Middle East conflict or a slide in German producer prices would impact the buyer appetite for the EUR/USD.
A EUR/USD drop below $1.05500 would bring the $1.05230 support level into play.
The 14-period Daily RSI, 47.20, suggests a EUR/USD break below the $1.05230 support level before entering oversold territory.
[ad_2]
Source link
