EUR/USD treads water at 0.9750 before pulling back to 0.9700 area
10.10.2022, 15:24

EUR/USD treads water at 0.9750 before pulling back to 0.9700 area

  • The euro, capped at 0.9750, remains close to two-week lows at 0.9680.
  • Rumours of a EU debt joint agreement might have favoured the pair.
  • Hopes of another big Fed rate hike are underpinning the US dollar.

The common currency has launched an attempt to take off from two-week lows at 0.9680, before hitting resistance right below 0.9750 during Monday’s US trading session.

Euro picks up on news about a joint debt agreement

A Bloomberg news report pointing out to the possibility that Germany might have agreed to back joint debt for loans to tackle the energy crisis might explain the EUR/USD's squeeze. The pair jumped about 45 pips in the matter of minutes to pull back to previous levels, around 0.9700, shortly afterwards.

From a wider perspective, the euro remains heading south, trading 0.25% down on the day and on track to a four-day negative streak against an stronger US dollar.

The greenback remains bid across the board with the investors bracing for another aggressive rate hike by the Federal Reserve later this week, following the buoyant US employment report seen on Friday.

US Non-Farm Payrolls increased by 263,000 in September, beating expectations of a 250,000 increment, while the unemployment level declined to 3,5% from 3,7% in the previous month. These figures have boosted confidence that the Fed will maintain its hawkish stance, which is underpinning demand for the USD.

Technical levels to watch

 

 

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