EUR/USD keeps pushing against 1.1600 resistance area

• The euro has found support at 1.1580 and is trying to regain the 1.1600 area.
• The EUR/USD is picking up on Friday against a somewhat ofter USD. 
• The euro should remain above 1.1540/1.1495 to stage a rebound – SocGen.

The euro has found buyers at the 1.1580 area, following a five-day losing streak, and is attempting to take back some ground and regain the 1.1600 level. The overall trend, however, remains strongly negative with the pair on track to close its third consecutive weekly decline, having depreciated about 2% in September.

The USD is pulling back amid lower US bond yields

The common currency is taking advantage of a somewhat softer US dollar on Friday. The greenback, which has been surging over the last six days amid market expectations that the Fed will lead the major central banks in adopting a more hawkish policy, is giving away gains on Friday, as bond yields tick down and investors grow wary about the lack of progress in the US Congress to avoid a government shutdown.

On the macroeconomic front, Eurozone’s inflation accelerated to 3.4% year on year, its higher level since 2008. The surging energy costs but also and higher prices for durable goods, due to chain supply disruptions have raised concerns about the impact on the Eurozone’s economic growth prospects.

US data has been fairly positive, with factory activity expanding beyond expectations in September, according to the manufacturing ISM data which advanced to 61.1, from 59.9 in August. Furthermore, consumer spending’s increased 0.8% in August against the market consensus of a 0.6% rise, while personal income rose 0.2%.

EUR/USD: The 1.1540/1.1495 support zone is critical to see a rebound – SocGen

According to the FX Analysis team at Societe Generale,  the euro should remain above 1.1495 to be able to perform a rebound: “Next potential support is at 1.1540/1.1495 representing the weekly Ichimoku cloud and the peak of March 2020. Defending this zone can result in an initial rebound (…) 1.1750 caps upside.”

Technical levels to watch