EUR/USD resistance was one of the main news stories among major currencies last week. Société Générale economists analyze the pair’s prospects.
It is too early to conclude that EUR/USD has bottomed
Whatever US GDP strength is released on Thursday, it should not affect expectations of a Fed pause in November following Chairman Powell’s remarks last week. However, a figure closer to 5% could make investors more nervous about a rate hike in December.
The widening of the spreads of the US Treasury: and the German 10-year Bund and the resistance of the EUR/USD was one of the main news in the foreign exchange market last week, but we think it is too early to conclude that The pair has bottomed out.
The options premium has continued to rise for EUR/USD calls, and it is entirely possible that large option structures held the pair between 1.0550 and 1.06. A pullback to 1.05 could occur if bond spreads take the lead again and the 10-year bond spread remains above 200 basis points following the US GDP release and ECB meeting.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
