EURUSD prints first daily loss in three around 1.0370 as US Dollar traces firmer Treasury yields

• EURUSD remains pressured around intraday low after snapping two-day uptrend.
• Fears of political deadlock in the United States, Covid woes from China underpin US Dollar’s safe-haven demand.
• Upbeat US Retail Sales for October also weigh on Euro.
• Final readings of Eurozone Inflation, second-tier US data could entertain traders.

EURUSD holds lower ground as sellers attack short-term key support around 1.0370 while heading into Thursday’s European session. In doing so, the Euro's value against the US Dollar drops for the first time in three days.

Strong United States data tease Euro sellers

Having witnessed firmer prints of the US Producer Price Index (PPI) for October, a three-year high in US Retail Sales for the said month raised doubts about the US Federal Reserve’s (Fed) dovish bias. As a result, the Fed policymakers have recently been less supportive of the easy rate hike chatters, which in turn exerts downside pressure on the EURUSD pair.

Mixed comments from European Central Bank officials strengthen bearish bias

On Wednesday, European Central Bank (ECB) policymaker Pablo Hernandez de Cos backed further rate increases but Vice President Luis de Guindos teased passive quantitative tightening. Further, ECB Governing Council member Ignazio Visco noted that the case for implementing a less aggressive approach was "gaining ground".

Challenges to sentiment also weigh on EURUSD

A likely tug of war between the US Republicans and Democrats due to the mixed results of the Midterm Elections seems to weigh on the sentiment of late. “Republicans were projected to win a majority in the U.S. House of Representatives on Wednesday, setting the stage for two years of divided government as President Joe Biden's Democratic Party held control of the Senate,” said Reuters.

Additionally, a multi-day high of Covid numbers in China also weighs on the risk appetite and underpins the US Dollar’s safe-haven demand. “Calibrating China's zero-COVID strategy to mitigate the country's economic impact will be critical to sustain and balance the recovery,” said Gita Gopinath, the first Deputy Managing Director of the International Monetary Fund (IMF), at the Caixin Summit on Thursday.

While portraying the mood, the US 10-year Treasury yields print the first daily gains in four around 3.71%. It should be observed that the S&P 500 Futures and equities in the Asia-Pacific zone grind lower of late.

Eurozone inflation, US second-tier data will be in focus

The final readings of the Eurozone inflation data for October, expected to confirm the 10.7% initial forecasts per the Harmonized Index of Consumer Prices (HICP) measure, will offer immediate directions to the Euro bears.

Following that, the US Weekly Jobless Claims and Philadelphia Fed Manufacturing Survey for November will be important to watch for the EURUSD pair traders.

Given the recent shift in the market’s sentiment amid a light calendar, as well as the firmer US Bond coupons, the EURUSD bears are likely to keep the reins unless the scheduled data points surprise traders.

EURUSD price technical analysis

EURUSD sellers poke 21 Simple Moving Average (SMA) support around 1.0370 amid bearish signals from the Moving Average Convergence and Divergence (MACD) indicator. Also adding strength to the Euro’s bearish bias is the retreat of a Relative Strength Index (RSI), located at 14, from the overbought territory.

That said, a clear downside break of 1.0370 could quickly drag Euro towards the 50-SMA support near 1.0210.

However, the previous resistance line from October 04, around 1.0185 at the latest, could challenge the Euro bears afterward.

Alternatively, Euro bulls need validation from a two-day-old descending resistance line, around 1.0400 at the latest.

Following that, the EURUSD run-up towards the monthly high near 1.0481 can’t be ruled out.

EURUSD: Four-hour chart

Trend: Further downside expected