The EUR/USD turned lower on Tuesday, as the dollar regained its footing ahead of an active trading week headlined by nonfarm payrolls on Friday.
The EUR/USD traded below the psychological 1.10 level, falling 0.5% or 52 pips to 1.0961. The EUR/USD has broken below the main support at 1.0964; a continuation below that level would pull the pair toward 1.0900. On the upside, initial resistance is likely found at the 1.10 level.
The US dollar index, an exchange-weighted average of the greenback against a basket of six currencies including the euro, gained 0.4% to 97.29.
The euro had mounted a solid rally against the dollar at the end of last week amid speculation that the Federal Reserve would hold off on raising interest rates until next year. The Commerce Department announced last week that the US economy expanded just 1.5% annually in the third quarter, signaling that a slowing recovery may warrant continued low-rate stimulus.
The Fed is widely expected to be tracking the October and November jobs numbers to determine if a liftoff in December is warranted. On Friday the Labor Department is expected to show the creation of 190,000 nonfarm jobs last month.
However, a closely followed gauge of US factory activity on Monday showed a contraction in manufacturing employment in October. The ISM manufacturing PMI was little changed at 50.1 in October, but the sub-index tracking employment fell into contraction.
The EUR/USD has declined 1.5% over the past four weeks and is down nearly 9% since the beginning of the year. Plans for additional stimulus by the European Central Bank is expected to place additional downward pressure on the common currency in the months ahead.
In commodities, gold prices continued to slide on Tuesday, falling to the lowest level since October 1. Gold for December delivery, the most actively traded contract, traded down $8.20 at $1,127.70 per troy ounce on the Comex division of the New York Mercantile Exchange. The yellow metal is down around $60 since the October 15 high of $1,187.50.
Energy futures rebounded on Tuesday, but remained near lows. US benchmark West Texas Intermediate (WTI) for December delivery traded up 57 cents or 1.2% at $46.71 a barrel. International benchmark Brent crude advanced 46 cents or 0.9% to $49.25 a barrel.
Tradersdna is a leading digital and social media platform for traders and investors. Tradersdna offers premiere resources for trading and investing education, digital resources for personal finance, market analysis and free trading guides. More about TradersDNA Features: What Does It Take to Become an Aggressive Trader? | Everything You Need to Know About White Label Trading Software | Advantages of Automated Forex Trading
