The Euro is experiencing continued downward pressure against the US Dollar across global currency markets, trading within a subdued range following recent declines. Analyst Quek Ser Leang at United Overseas Bank maintains a bearish stance on the EUR/USD currency pair, noting that although recent downward momentum has eased somewhat, the underlying setup still tilts negatively. In intraday trading, the pair is expected to oscillate primarily between 1.1460 and 1.1500. However, technical indicators continue to point toward extended vulnerability in the weeks ahead, leaving lower support zones vulnerable to further tests.
Euro Technical Trajectory and Multi-Week Projections
Examining recent market movements reveals that two days earlier, the Euro plunged to a low of 1.1460. When the currency was positioned around 1.1470, deeply oversold conditions suggested that any further drop would likely stay constrained inside a 1.1435 to 1.1505 boundary. The Euro subsequently edged down to a trough of 1.1450, staged a brief rebound toward 1.1497, and concluded the session little changed at 1.1474, representing an increase of 0.09 percent. While the pace of the sell-off has temporarily stabilized, overall technical momentum has not shifted in favor of buyers.
Looking out over a one to three-week timeframe, the negative trajectory remains intact, matching the assessments made on 17 September when the spot rate sat at 1.1470. According to Quek Ser Leang, the Euro “could continue to decline to 1.1435, with potential extension to 1.1400.” This outlook will stay firmly in place as long as the strong resistance level at 1.1545 is not breached. In addition, exponential moving averages continue to signal downward pressure for the single currency.
Australian Dollar Gains Traction on Softer US Yields
Elsewhere in the foreign exchange spectrum, the Australian Dollar traded with a positive bias for the second consecutive day, holding firmly above the 0.7100 mark during Friday’s Asian session. A retreat in US government bond yields put US Dollar buyers on the defensive, providing breathing room for competing currencies. Furthermore, hawkish remarks from Reserve Bank of Australia Governor Bullock fueled expectations of upcoming interest rate increases, offering substantial backing to the Aussie. Nonetheless, the Federal Reserve's hawkish stance, paired with prevailing geopolitical uncertainties, has cushioned the US Dollar's broader losses and placed a lid on aggressive gains for the pair.
Bank of Japan Rate Hike and Yen Movement
In currency cross-currents, the USD/JPY pair reversed its climb toward two-week highs near 157.30 during Friday's European session. The Japanese Yen captured fresh support following remarks made by Bank of Japan Governor Ueda during the post-monetary policy meeting press conference. Earlier in the session, the Japanese central bank implemented a surprise interest rate increase to 1.25 percent through a 7-2 vote.
For more than ten years, Japan’s ultra-low interest rates helped finance trillions of dollars in worldwide investments, establishing the Japanese Yen as one of the cheapest global funding sources available. While most major economies actively lifted borrowing costs to combat inflationary pressures, Japan stood out as a solitary global outlier. With the central bank moving toward tighter policy, that longstanding funding dynamic appears to be transitioning into an entirely different regime.
Gold Advances as Crude Oil Pullback Calms Inflation Fears
In precious metals, gold drew sustained follow-through buying for a second straight session, touching a fresh weekly high as European trading got underway. US bond yields retreated further from multi-year peaks as a recent drop in crude oil prices eased immediate worries regarding runaway inflation. This moderation in inflationary pressure checked the US Dollar’s advance, paving the way for further gains across bullion markets.
