Should we be wary of the euro's direction, given that it remains capped even under QT conditions?

Should we be wary of the euro's direction, given that it remains capped even under QT conditions?

11.10.2022

In yesterday’s U.S. trading session, the EUR/USD pair fell slightly as the yield on the 10-year U.S. Treasury note rose to 3.98%, approaching the key 4% threshold. The EUR/USD dropped by approximately 70 pips from 0.9752 to 0.9679. Although it briefly rose above the 20-period moving average on the hourly chart, it ultimately closed lower.The pair is testing lower levels during today’s Asian session as well, and with momentum suggesting it may break below yesterday’s low, we will be watching closely to see if the decline continues into the European session.

In contrast to the pound, which is undergoing quantitative easing (QE), the euro—despite plans to continue quantitative tightening (QT)—faced resistance on the upside and fell against the yen. The EUR/JPY pair is currently trading around 141.151 and appears poised to break below the 200-period simple moving average (SMA) on the 4-hour chart without finding support. On the daily chart, the pair is also trading below the 20-period moving average (MA), and with a reversal in the RSI confirmed, traders should remain cautious of a continued decline.

Today, the UK unemployment rate is scheduled for 3:00 PM Asia time; Turkey’s current account balance at 4:00 PM Europe time; the US NFIB Small Business Optimism Index at 7:00 PM; remarks by Bank of England Deputy Governor Kanliff at 12:00 AM US time; remarks by US Federal Reserve Bank of Cleveland President Mester at 1:00 AM; a US 3-year Treasury auction at 2:00 AM;at 27:00, remarks by SNB Governor Jordan and remarks by BOE Deputy Governor Kanliff; and at 7:00 the following day, remarks by RBA Deputy Governor Ellis. With quantitative tightening (QT) underway, we should remain vigilant regarding the direction of the euro, which faces resistance on the upside.

Past Market Reports

1. 22.04.2026New

   Will interest grow in the upside potential of the Swiss franc, which has risen against the yen?

2. 21.04.2026New

   With the euro-Australian dollar pair hitting new lows this month, attention is turning to how much further it might fall

3. 20.04.2026New

   Will the market wait and see how much further the U.S. dollar can rise against the yen?

4. 17.04.2026New

   Will the weakening Swiss franc recover? Attention is turning to price movements during European trading hours.

5. 16.04.2026New

   Market participants are likely keeping a close eye on the upside potential of the euro, which has risen against the U.S. dollar

6. 15.04.2026

   Should we keep an eye on remarks by key figures in the U.S. and try to gauge the direction of currency strength?

7. 14.04.2026

   Market participants are likely watching for signs of a rebound in the Canadian dollar, which fell against the U.S. dollar following the release of employment figures

8. 13.04.2026

   Will the weakening Swiss franc continue to strengthen against the yen, or should we wait and see?

9. 10.04.2026

   Will the U.S. dollar, which has fallen against the yen, continue its downward slide, or should we wait and see how the market moves?

10. 09.04.2026

    Should we keep an eye on the upside for European currencies that have risen against the U.S. dollar?