The Euro is maintaining its gains this week, aided by broadening rate differences and a neutral stance from the ECB. After surpassing the 50-day moving average, the EUR is now in a range of 1.1650\u20131.1750 and may approach resistance around 1.18. <\/p>\n
Minimal reaction was noted to euro-area retail sales data for October, which remained unchanged at 0.0% month-on-month. The EUR shows bullish momentum, with the RSI exceeding 60, and potential resistance levels are identified at 1.17, 1.1750, and 1.18. <\/p>\n
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We see the Euro holding its recent gains as the interest rate spread between the Fed and the ECB continues to widen. Recent data shows US core PCE inflation has cooled to 2.8%, while the Eurozone’s HICP remains stickier at 3.1%. This divergence is the primary driver supporting the single currency right now.<\/p>\n
Given the bullish momentum, we are looking at options strategies to capitalize on a potential move higher in EUR\/USD. Buying call options with a strike price around 1.1750 could be a direct way to play for a break towards the 1.18 resistance level. A bull call spread might be a more conservative approach to limit costs and profit from the pair remaining in its new range.<\/p>\n
Expectations for renewed Fed dovishness are solidifying, with the market now pricing in a greater than 75% chance of a rate cut at the December 17th meeting. This follows last week’s softer Non-Farm Payrolls report, which showed the US labor market is finally cooling. This reinforces our view that the path of least resistance for the US dollar is lower against the Euro.<\/p>\n
The current yield spreads have reached 14-month highs, a situation we haven’t seen since mid-2023 when the Euro was trading in a lower range. The decisive break above the 50-day moving average, which now sits near 1.1612, confirms this new bullish momentum. We will be watching the 1.1650 level as near-term support in the coming days.<\/p>\n","protected":false},"excerpt":{"rendered":"
Euro holds gains amid ECB neutrality and rate differentials; bullish momentum targets resistance near 1.18.<\/p>\n","protected":false},"author":62,"featured_media":0,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-36041","post","type-post","status-publish","format-standard","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/36041","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=36041"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/36041\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=36041"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=36041"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=36041"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}