EUR/USD trims gains as stocks in Wall Street erase gains
27.09.2022, 16:04

EUR/USD trims gains as stocks in Wall Street erase gains

  • US dollar recovers after September Consumer Confidence data.
  • Stocks move off highs as US 10-year yield hits fresh highs.
  • EUR/USD unable to sustain recovery, holds above lows.

The EUR/USD dropped further after the beginning of the American session and hit levels under 0.9600. It is hovering at 0.9620/25, around the 20-hour SMA without a clear intraday direction. A stronger US dollar weakened the recovery of pair.

Dollar cheers US data

Following the release of better-than-expected US Consumer Confidence data, the greenback started to recover from intraday losses across the board. The economic figures pushed US yields higher. The US 10-year yield climbed to 3.97%, hitting the highest since 2010.

At the same time, stocks in the US trimmed gains. The Dow Jones pulled back more than 300 points, and is down by 0.07% while the S&P 500 rises by 0.08%. Stock indices continue to be unable to sustain a rebound suggesting that fear and concerns are still present among market participants, which favors the greenback as investors look for a safe haven.

Comments from European Central Bank officials point to more rate hikes. De Guindos mentioned data will determine the trajectory. At the same time, in the US, Bullard warned they have a serious inflation problem.

The 0.9600 zone holds the key for the moment

If the euro manages to recover above 0.9630 it could gain momentum for another test of 0.9660, the last protection for 0.9700. On the flip side, a consolidation below 0.9600 would expose the cycle low at 0.9548 (Sep 26 low).

Technical levels

 

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