The EUR/USD currency pair experienced a minor recovery after dipping to a low of 1.0900 on Thursday. This decline marked the lowest point for the pair since early August. By the end of the trading day, EUR/USD managed to stabilize and started the following European session trading around 1.0950, indicating a slight upward shift in market sentiment.
The movements on Thursday were initially influenced by disappointing inflation data released in the US. The Consumer Price Index (CPI) for September showed a year-on-year increase of 2.4%, a slight decline from 2.5% in August. Additionally, the core CPI — which excludes food and energy — rose by 3.3%, surpassing both the previous month’s figure and market predictions of 3.2%. Conversely, the latest figures for weekly Initial Jobless Claims revealed an uptick to 258,000 from the previous 225,000, adding further pressure to the US Dollar.
Investors are now turning their attention to the upcoming Producer Price Index (PPI) data. Market expectations are set for a 0.2% rise in the monthly core PPI, following a 0.3% increase in August. A result exceeding expectations could bolster the US Dollar as the week closes, potentially limiting further gains for EUR/USD .
From a technical perspective, the Relative Strength Index (RSI) on the 4-hour chart indicated a reduction in bearish momentum early Friday, climbing above the 40 level. The level of 1.0950, coinciding with the 20-period Simple Moving Average and the Fibonacci 61.8% retracement of the recent uptrend, has emerged as a critical pivot level. If reinforced as a support level, potential resistance levels could emerge at 1.1000 and 1.1050. Should 1.0950 fail to hold, the focus may shift to support levels at 1.0900, 1.0870, and 1.0800.
