EUR/USD drops to fresh weekly lows, despite mixed US economic data

• US economic slowdown and high inflation pressures keep the Federal Reserve focused on price stability.
• Mixed US employment data and a rally in US bonds contribute to a weaker US Dollar.
• Lack of new Eurozone data leaves traders relying on Tuesday's figures, justifying ECB's pause on tightening.

The Euro (EUR) extended its losses versus the US Dollar (USD) in the early trading session on Wednesday, even though economic data from the United States (US) portrays the economy is slowing down, but high inflation pressures keep the US Federal Reserve (Fed) under pressure to deliver price stability. The EUR/USD is trading at 1.0540, down 0.32%.

EUR/USD down 0.32% as mixed US data and ECB's pause on the tightening cycle weigh on the Euro

Economic data in the US deteriorated the outlook to the already battered US Dollar. Employment data revealed by Automatic Data Processing (ADP) showed that private hiring advanced more than September’s but missed estimates by a substantial quantity. Later, the US Bureau of Labor Statistics (BLS) announced that job openings rose above estimates and the prior reading figures, with September JOLTs hitting 9.553M, vs. 9.25M foreseen and 9.47M previous data.

Further data showed the US Treasury Department is expected to auction 112 billion, less than the 114 billion estimates by analysts, on its quarterly refunding, triggering a rally in US bonds to the detriment of US yields.

In addition to that, business activity in the manufacturing front is losing steam as the ISM Manufacturing PMI for October dropped below the 50 contraction/expansion threshold for twelve straight months, sponsored by the fall in New Orders, while Manufacturing Prices rose.

On the Eurozone (EU) front, Wednesday's lack of economic data left traders adrift to Tuesday’s EU figures and inflation data, which justified the European Central Bank (ECB) pause on its tightening cycle as inflation dipped below the 3% threshold.

EUR/USD Price Analysis: Technical outlook

The EUR/USD downtrend remains intact, and it could accelerate if the pair achieves a daily close below the bottom trendline of the bearish flag. Once cleared, the next support would be the October 13 swing low of 1.0495, ahead of extending its fall to October’s low of 1.0448. Conversely, if the major remains above the bottom trendline, a test of the 1.0550 mark is on the cards, ahead of 1.0600.