- EUR/USD retreats from intraday high, pares the first daily gains in four.
- Markets fade early Asian session optimism amid mixed concerns over ECB, Fed.
- Covid woes exert additional downside pressure on EUR/USD price.
- Preliminary readings of Eurozone Consumer Confidence for November could direct Immediate moves.
EUR/USD trims intraday gains around 1.0250 as European traders brace for Tuesday’s task. The major currency pair’s latest losses could be linked to mixed signals from the central bankers, as well as the coronavirus woes from China. Additionally, the cautious mood ahead of the preliminary readings of the Eurozone Consumer Confidence for November also seemed to have challenged the pair buyers of late.
Recently, European Central Bank (ECB) policymaker Robert Holzmann backed a third consecutive 75 basis points (bps) rate increase for the December monetary policy meeting, per the Financial Times (FT).
Earlier in the day, ECB Board member and Bank of Portugal Governor Mario Centeno raised doubts on the 75 bps rate hike whereas ECB’s Chief Economist Philip Lane said that the central bank will consider reducing its pace of rate increases at its December 15 meeting.
On the other hand, the United States Federal Reserve (Fed) policymakers. Federal Reserve Bank of Cleveland President Loretta Mester said in a CNBC interview, “I think we can slow down from 75 at the December meeting.” Previously, Atlanta Federal Reserve President Raphael Bostic also turned down the 75 bps move and challenged the US Dollar bulls. Additionally, downbeat prints of the Chicago Fed National Activity Index for October, to -0.05 compared to 0.17 prior, also weighed on the US Treasury yields.
However, the previous week’s strong US Retail Sales and Producer Price Index (PPI) keep traders on the edge amid hawkish bets on the Fed’s next move, as well as looming covid concerns surrounding China.
Against this backdrop, S&P 500 Futures reverse the day-start gains to recall 3,957 level while the US 10-year Treasury yields drop 1.3 basis points (bps) to 3.814% by the press time.
Moving on, EUR/USD bears are likely to rush towards retaking control amid central bank woes and the fears of the coronavirus. However, today’s Eurozone Consumer Confidence for November, expected -26.0 versus -27.6 prior, could direct immediate moves.
Unless crossing a convergence of the two-week-old ascending trend line and the 10-Day Moving Average (DMA), currently around 1.0285, the EUR/USD bears can aim for September’s peak surrounding 1.0200.