- Mixed US data ignored by market participants focus on politics.
- EUR/USD gains after losing ground during four consecutive days.
The EUR/USD pair is rising modestly on Friday and during the last hours it trimmed gains. The pair peaked at 1.1745 and as of writing it trades at 1.1720, gaining ten pips for the day and more than a hundred below the level it had a week ago.
The greenback lost momentum on Friday amid an improvement in risk appetite. However, over the last hour, equity prices in Wall Street rose further and EUR/USD pulled back. The Dow Jones gains 0.88% and the Nasdaq rises 0.30%.
Higher US yields are supporting the greenback that is posting modest losses despite the positive risk environment. The DXY bottomed earlier today at 93.53 and trades at 93.70.
Economic data from the US came in mixed on Friday. Retail sales during September rose 1.9%, well above market consensus. Industrial production in September dropped unexpectedly. The last report was a modest increase in consumer confidence measured by the University of Michigan.
The risk of a steeper decline in EUR/USD is still well-limited according to Valeria Bednarik, Chief Analyst at FXStreet. “In the weekly chart, the pair continues to develop above a firmly bullish 20 SMA, which extended its advance above the larger moving averages. Technical indicators have turned south, but hold within familiar levels and far above their midlines.”
Bednarik added that the daily chart looks neutral in EUR/USD, after it spent most of this week hovering around a mild-bearish 20-DMA, although the larger moving averages head firmly higher well below the current level. “Technical indicators, in the meantime, hover within neutral levels, lacking clear directional strength.”
Credit: FX Street