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EUR/USD Pullback Tips RSI Into Oversold Territory

EUR
  • EUR/USD re-testing the overnight lows, meeting support at 1.0555 in the process. This marks the lowest level for the pair since mid-March, a move that has now tipped the 14-d RSI into oversold territory, with key support just below at 1.0516.
  • Eurozone CPI estimate data on Friday could prove pivotal for any test - September's print is expected to bring the first Y/Y HICP below 5% since November 2021 - although markets remain wary of further ECB hikes, as per ECB's Elderson speaking to MNI this morning: "further monetary tightening cannot be ruled out". Markets will also be watching for any signs of month-end rebalancing flows, all of which we have seen suggest USD buying into the Friday fix.
  • Outside of the USD, EUR looks healthier vs GBP, with the cross within range of the 200-dma resistance at 0.8711. BoE's Hauser takes focus ahead, speaking at an event with MNI at 1030BST on Thursday.

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