EUR/USD and a Return to $0.99 in the Hands of US JOLTs Job Openings

It was a quiet start to the European session for the EUR/USD. Following the disappointing PMI numbers from Monday, the market focus shifted to industrial inflation figures for the Eurozone.

ECB member chatter has become more hawkish, and with inflationary pressures continuing to build, today’s numbers drew interest.

In August, the Eurozone’s annual rate of industrial price inflation accelerated from 37.9% to 43.3%. Economists forecast a rate of 43.1%.

According to Eurostat,

• Industrial prices increase by 116.8% in the energy sector, 19.9% for intermediate goods, and 9.8% for durable consumer goods.
• Prices for capital goods increased by a more modest 7.8%.
• In total industry excluding energy, prices rose by 14.5%.
• Ireland (+97.4%) registered the largest year-over-year increase.
• In August, industrial producer prices increased by 5.0%, with the energy sector seeing prices up 11.8%.

While the stats influenced, ECB member chatter also needs monitoring. ECB President Christine Lagarde will speak today with students at a Central Bank of Cyprus event. ECB members Andrea Enria and Luis de Guindos will also deliver speeches.

With the market bets of a Fed 75-basis point rate hike easing, hawkish chatter would deliver a EUR/USD boost.

EUR/USD Price Action

At the time of writing, the EUR was up 0.38% to $0.98619. A bullish morning saw the EUR rise from an early low of $0.98063 to a high of $0.98959.

The EUR/USD broke through the First Major Resistance Level (R1) at $0.9862 before falling back.

Technical Indicators

The EUR/USD needs to avoid the $0.9807 pivot to break out from the First Major Resistance Level (R1) at $0.9862 and retarget the Second Major Resistance Level (R2) at $0.9899. Following today’s industrial price inflation numbers, hawkish ECB member chatter would support a bullish session.

However, US economic indicators will need to disappoint to support an extended rally and a return to $0.99. The Third Major Resistance Level (R3) sits at $0.9991.

A fall through the pivot would give the bears a run at the First Major Support Level (S1) at $0.9770. However, barring a market flight to safety, the EUR/USD pair would likely avoid sub-$0.9750 and the Second Major Support Level (S2) at $0.9715.

The Third Major Support Level (S3) sits at $0.9623.

Looking at the EMAs and the 4-hourly chart, the EMAs send a more bullish signal. The EUR/USD sits above the 100-day EMA, currently at $0.98338. The 50-day EMA closed in on the 100-day EMA, with the 100-day EMA narrowing to the 200-day EMA, delivering bullish signals.

A EUR/USD breakout from R1 ($0.9862) would give the bulls a run at R2 ($0.9899) and the 200-day EMA ($0.99239). However, a EUR/USD fall through the 100-day EMA ($0.98338) would give the bears a run at the 50-day EMA ($0.97831) and S1 ($.0.9770).

The US Session

It is a busy day ahead on the US economic calendar. The US labor market is in the spotlight.

US core durable goods orders will draw interest alongside August’s JOLTs job openings report. However, market sensitivity to US labor market numbers will give the JOLTs job openings more influence ahead of the September nonfarm payroll report.

FOMC member commentary will also draw interest, with members Williams, Logan, Mester, and Fed Governor Jefferson speaking today.