EUR/USD falls back below the 200-hour moving average
The inability to move towards a break of the 1.1400 is proving to be a key failure for buyers on the day. Price retraced back towards the 200-hour MA (blue line) thereafter and then news came in that auto tariffs are reportedly set to hit before Christmas. That was enough for sellers to drive price back below the 200-hour MA, thus breaking the near-term bullish bias in the pair.
With the dollar holding its own despite the fall in Treasury yields, it’s looking more and more like the “Powell put” is not likely to have a lasting impact on markets. There was a slight dovish tilt no doubt, but it’s not exactly a clear cut signal that the Fed will be pausing any time soon. I reckon market participants will be more convinced of that if the minutes start to hint at something similar.
For EUR/USD, price now looks to be moving back towards the resistance region around 1.1340-50 before the 100-hour MA (red line) @ 1.1331 comes into the picture. The latter will be a key level to watch out for in US trading as a break below that would see sellers establish a near-term bearish bias once again.
It’s still a bit early to call for a reversal just yet but the signs are looking up for the dollar as the hours go by. However, be wary of the move in Treasury yields as that could still have a more material impact on markets and the dollar later in the day.