Title: EUR/USD looks to 50 DMA near 1.0000 on the road to recovery

October 6, 2022 12:31 AM ET

By: AnalysisWatch

The EUR/USD is making slight recovery attempts just above the 0.9900 level ahead of the European open, while the dollar is licking its wounds after the steep decline in the US in the previous session.

Despite the mixed US ADP and ISM Services PMI data, which dampened expectations for aggressive Fed rate hikes, investors remained optimistic so far on Thursday. However, this had little impact on the market's view of a 75 basis point Fed rate hike in November, which now stands at 65%. U.S. government bond yields went on the defensive amid the Fed's unclear outlook for a rate hike, supporting the major currency pair.

Despite the renewed uptrend in the major currency, EUR bulls remain cautious amid escalating geopolitical tensions between the West and Russia over the Ukraine crisis. The European Union (EU) on Wednesday endorsed new sanctions against Russia, including the oil price cap.

As geopolitical headlines and risk trends continue, all eyes will be on Eurozone retail sales, ECB minutes, and Fed speakers for fresh stimulus.