EUR/USD held firm near 1.1220 in early European trade on Monday as the US dollar softened alongside falling US Treasury yields. The 10-year yield slipped to 4.97% and the 30-year stood at 5.299%, both near one-month lows, with attention turning to the Federal Reserve and European Central Bank rate decisions later in the week. Derivatives markets implied a 90.6% chance of the Fed keeping rates unchanged at its October meeting on Wednesday, while also assigning a 79.4% probability of a rate rise in December. In the euro area, France-related political and fiscal concerns were cited as a potential headwind for the single currency, while the ECB decision on Thursday was expected to leave rates unchanged.
Fed And ECB Policy Outlook
A separate readout put Fed Chair Warsh’s speech at 5.6/10 on the FXS Speechtracker versus a historical average of 6.1/10, while the FXS Fed Sentiment Index was unchanged at 127.51 after a 0.00-point move.
EUR/USD Technical Analysis
Technically, EUR/USD was described as retaining a bearish bias below the 100-day SMA, with resistance levels at 1.1270 and 1.1315, then the 100-day SMA at 1.1450. Support was placed at 1.1185 and 1.1138, with 1.1100 flagged as a further downside marker; the 14-day RSI sat around 40.
