EUR/USD inter-markets: door open for 1.0950

EUR/USD is advancing for the first time after three consecutive declines, showing some reluctance to break below the psychological support at 1.1000 the figure on a more sustainable fashion.

The now offered bias around the greenback is giving some respite to part of the risk-associated universe, with the US Dollar Index receding from earlier 7-month highs beyond the 98.00 handle.

The USD-dynamics remain the exclusive driver behind the pair’s price action amidst the absence of relevant events in Euroland and radio silence from the European Central Bank. In that regard, yesterday’s FOMC minutes have showed a divided Committee and that further tightening will remain ‘data dependent’, although the case for a December hike seems to gather traction with the day.

In view of Fed Funds futures prices, CME Group’s FedWatch tool now sees the probability of higher rates by year-end

Yields in German Bunds are navigating a ‘sea of red’ today, although the spread differential vs. their US peers is lending some support to EUR and thus accompanying the now upbeat tone around the single currency.

The upside in EUR is also deriving support from volatility tracked by VIX, which is flirting with session tops.

In the meantime, the area around the critical support at 1.1000 grabs all the attention today, as the 7-month support line is located around here. If cleared, the next relevant level emerges around the mid-1.0900s, July lows ahead of the 1.0900 neighbourhood, June lows.