The EUR/USD currency pair began the week positively after a challenging previous week, where it faced losses of over 1% for three consecutive sessions. Despite opening with bullish momentum, the pair showed signs of retreat after reaching the significant 1.0500 mark, indicating a struggle to maintain the upward movement amidst a lack of sustained bullish momentum.
Market reactions to the appointment of Scott Bessent as the US Treasury Secretary influenced the USD’s performance, as this news led to a notable drop in US Treasury bond yields. Bessent, a financial executive with a reputation as a fiscal hawk, aims for a balanced budget strategy that suggests reduced budget deficits over the coming years. While his approach may alleviate some anxiety over extreme fiscal policies, implementing these changes could prove challenging. Additionally, his perceived moderation on trade issues may offer further reassurance to investors.
Concurrent with this, U.S. stock index futures showed a positive shift, rising about 0.5% in early European trading. This shift in risk sentiment could result in additional selling pressure on the USD, potentially allowing EUR/USD to regain some lost ground if positive market trends continue after the opening of Wall Street.
Looking ahead to the European economic landscape, the upcoming IFO indices, including the Current Assessment and Business Climate data for November, will be closely monitored. Should these figures reveal a significant downturn in business sentiment, it may pose a challenge for the EURO ’s upward movement, prompting an immediate market response.
From a technical perspective, EUR/USD remains within a descending regression channel. The Relative Strength Index (RSI) indicates bearish sentiment, lingering below the neutral 50 level. Immediate support levels are situated around 1.0450 and 1.0400, while upward resistance can be identified at 1.0500, followed by additional levels at 1.0535 and 1.0600.
