Some buyers are attracted to the EURUSD currency pair at the rate of 1.08860 on Friday, supported by a slight decline in the value of the US dollar.

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• EUR/USD attracts some buyers on Friday and draws support from a modest USD downtick.

The pair currently trades last at 1.08860.

The previous day high was 1.0918 while the previous day low was 1.0856. The daily 38.2% Fib levels comes at 1.088, expected to provide support. Similarly, the daily 61.8% fib level is at 1.0895, expected to provide resistance.

The EUR/USD pair edges higher during the Asian session on Friday and for now, seems to have snapped a five-day losing streak to a six-week low, around the 1.0855 region touched the previous day. The uptick, however, lacks follow-through, with spot prices currently trading with only modest intraday gains around the 1.0885-1.0890 region, up 0.15% for the day.

The US Dollar (USD) remains on the defensive for the second successive day in the wake of retreating US Treasury bond yields and turns out to be a key factor lending some support to the EUR/USD pair. That said, growing acceptance that the Federal Reserve (Fed) will keep interest rates higher for longer, which had lifted the yield on the benchmark 10-year US government bond to a ten-month high on Thursday, continues to act as a tailwind for the Greenback.

The prospects for further policy tightening by the Fed were reaffirmed by the latest US CPI report, which showed a moderate rise in consumer prices in July. Adding to this, the US PPI climbed slightly more than expected last month and suggested that the battle to bring inflation back to the Fed’s 2% target is far from being won. Moreover, the minutes from the July 25-26 FOMC meeting revealed that policymakers continued to prioritize the battle against inflation.

Meanwhile, the incoming US macro data continues to point to an extremely resilient economy and should allow the Fed to stick to its hawkish stance, which revives fears about headwinds stemming from rapidly rising borrowing costs. This, along with the worsening economic conditions in China, fuels recession fears and tempers investors’ appetite for riskier assets. The anti-risk flow might further benefit the Greenback’s relative safe-haven status against its European counterpart.

Apart from this, speculations that the European Central Bank (ECB) will halt its streak of nine consecutive rate hikes in September might contribute to keeping a lid on any further gains for the EUR/USD pair. Hence, it will be prudent to wait for strong follow-through buying before confirming that the recent downfall witnessed over the past month or so has run its course and positioning for any further gains. Market participants now look to the ECB board member Philip Lane’s speech.

This, along with the final Euro Zone CPI print, might influence the shared currency and provide some impetus to the EUR/USD pair. Meanwhile, there isn’t any relevant economic data due for release from the US on Friday, leaving the USD at the mercy of the US bond yields. Apart from this, the broader risk sentiment will drive demand for the safe-haven buck and provide some impetus to the major. Nevertheless, spot prices remain on track to register losses for the fifth successive week.

Technical Levels: Supports and Resistances

EURUSD currently trading at 1.0888 at the time of writing. Pair opened at 1.0872 and is trading with a change of 0.15 % .

The pair is trading below its 20 Daily moving average @ 1.0981, below its 50 Daily moving average @ 1.0975 , below its 100 Daily moving average @ 1.0931 and above its 200 Daily moving average @ 1.0789

The previous day high was 1.0918 while the previous day low was 1.0856. The daily 38.2% Fib levels comes at 1.088, expected to provide support. Similarly, the daily 61.8% fib level is at 1.0895, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1.0846, 1.0821, 1.0785
• Pivot resistance is noted at 1.0908, 1.0944, 1.097

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