EUR – The euro hit a 16-month low, testing the 1.13 level

Data released by the Conference Board showed that the US consumer confidence index fell to 81.9 in September, a decrease of 6.7 points from the previous month, significantly lower than the market consensus of 89. Respondents generally expressed concerns about inflation and the employment outlook. For the first time in the four years since the survey began, the percentage of respondents who felt their personal finances were poor exceeded those who felt they were in good financial condition, a significant turning point. The US Bureau of Labor Statistics also released its August job openings and labor force turnover report on Tuesday. The data showed that the number of job openings in the US fell slightly to 7.079 million in August, a decrease of 256,000 jobs that month. The job losses were mainly concentrated in professional business services and healthcare-related industries. The market consensus was 7.2 million job openings, meaning the actual figure was lower than market expectations.

The dollar index continued its upward trend on Tuesday, briefly hitting its highest level since July 28; US Treasury yields hovered near multi-year highs; the benchmark 10-year Treasury yield closed above 5% after touching its highest level since June 2007. Investors are preparing for a series of upcoming US economic data releases. First, attention will be focused on the US August Personal Consumption Expenditures (PCE) price index released on Wednesday, followed by the September non-farm payrolls report on Friday. Investors are also closely watching the prospect of potential oil supply disruptions caused by the Middle East conflict. According to trade sources and shipping data, Saudi Arabia has restarted crude oil loading operations at its Red Sea port of Yanbu after resuming operations of the East-West oil pipeline, improving the outlook for Middle Eastern oil exports.

The euro fell to a 16-month low of 1.1311 against the dollar on Tuesday, before recovering slightly to 1.1340 at the close. Technical charts show that the RSI and stochastic oscillators have initially rebounded and are holding above the 1.13 level, suggesting that the euro/dollar exchange rate may stabilize slightly. Based on the cumulative decline over the past few months, a rebound of 23.6% and 38.2% would target 1.1430 and 1.1485 respectively, while a further 50% and 61.8% rebound would target 1.1525 and 1.1570. Significant resistance is expected at the 25-day moving average of 1.1535 and 1.1650. Support levels to watch remain at 1.13, with the next important reference point being the March 2025 low of 1.1210, and the crucial level being the 1.10 mark that was barely held in January of last year.

Estimated Range:

Resistance 1.1430 - 1.1485 - 1.1525 – 1.1570 – 1.1650

Support 1.1350 – 1.1300* - 1.1200 – 1.1000

News Summary

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Eurozone September Services Confidence Index 6.1
Eurozone September Industrial Confidence Index -3.8
Eurozone September Economic Confidence Index 97.9
Eurozone September Business Climate Index -0.06
Eurozone September Consumer Confidence Index -16.5

Focus:

Wednesday
Germany August Retail Sales (14:00)
Germany August Employment Data (15:55)
Germany September CPI‧HICP (20:00)

Thursday
Eurozone September Manufacturing PMI (16:00)

Friday
Eurozone September HICP (17:00)
Eurozone August Unemployment Rate (17:00)

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