EUR/USD to head back lower as it is hard to see the mood improving

EUR/USD has bounced off the lows, but there are good reasons to believe its upswing would be limited. EZ data could push the pair higher before several issues and US data could push it back down, according to FXStreet’s Analyst Yohay Elam.

See – EUR/USD: Scope for a slump to the 1.1395 mark – Commerzbank

Long list of worries could send EUR/USD back down
“The preliminary Consumer Price Index (CPI) for September is set to show an annual increase of 3.3%, up from 3% in August. That could push the European Central Bank toward reducing its bond purchases, thus boosting EUR/USD. Everything else is pointing down.”
“Infighting within the Democratic Party is weighing on sentiment and boosting the safe-haven dollar. House Speaker Nancy Pelosi was forced to withdraw a vote on the bipartisan infrastructure bill as the progressive wing of her party opposes backing it without guarantees on the larger spending legislation worth around $3.5 trillion.”

“The Core Personal Consumption Expenditure (Core PCE) is the Federal Reserve’s preferred gauge of inflation and is set to show some moderation. However, it would probably take a significant plunge to make the bank rethink its upcoming tapering. Fed tightening has been driving the dollar higher.”

“The ISM Manufacturing Purchasing Managers’ Index is expected to remain at elevated levels, thus supporting the taper decision.”