EURUSD extends recovery above the 1.03500 level on improved market mood. The US dollar gained strength yesterday on civil unrest in China due to strict Covid rules. Markets eye US ADP employment and Powell's speech for direction. Any dovish comments from the Fed chairman will push the euro further higher to the 1.0500 level. It hits an intraday high of 1.03657 and is currently trading around 1.03653.
US conference board consumer confidence declines to 100.20 in Nov compared to a forecast of 102.20. Markets eye US ADP employment and US prelim GDP for further direction.
According to the CME Fed watch tool, the probability of a 50 bpbs rate hike in Dec dropped to 67.5% from 75.8% a week ago.
The US 10-year yield pared more than 1% after hitting a high of 3.761%. The US 10 and 2-year spread widened to -74 basis points from -57 bpbs.
Technical:
On the higher side, near-term resistance is around 1.0400 and any convincing breach above will take the pair to the next level of 1.0435/1.0500.
The pair's immediate support is at 1.0300, breaking below targets of 1.02200.
Indicator (4-hour chart)
Directional movement index – Bullish
It is good to buy on dips around 1.0358-60 with SL around 1.0300 for a TP of 1.0500.
