• EURUSD comes under pressure just below the 1.0100 region.
• Markets’ attention remains on the results from the US midterm elections.
• US inflation figures will take centre stage later in the week.

Sellers appear to remain clustered around the 1.0100 region and prompt EURUSD to struggle to retest/surpass that key resistance zone so far on Wednesday.

EURUSD: Upside limited around 1.0100

EURUSD gives away some gains after three consecutive daily advances and in response to another failed attempt to revisit/trespass the 1.0100 zone, always on the back of a lacklustre rebound in the dollar.

The recent change of heart around the greenback – particularly triggered following October’s Payrolls – has been sustaining the sharp upside bias in the pair and the rest of the risk-associated universe. The move in the money markets, however, has been fairly noticed, with yields on both sides of the ocean treading water in the upper end of the recent range.

Nothing worth mentioning data wise in the Euroland, with only a 10-year Bund auction due later in the session. In the US, MBA Mortgage Applications are due in the first turn seconded by Wholesale Inventories and speeches by FOMC’s J.Williams and T.Barkin.

What to look for around EUR

EURUSD faces some selling pressure near the 1.0100 region amidst another bullish attempt in the greenback.

In the meantime, price action around the European currency is expected to closely follow dollar dynamics, geopolitical concerns and the Fed-ECB divergence. The recent decision by the Fed to hike rates and the likelihood of a tighter-for-longer stance now emerges as the main headwind for a sustainable recovery in the pair.

Furthermore, the increasing speculation of a potential recession in the region - which looks propped up by dwindling sentiment gauges as well as an incipient slowdown in some fundamentals – adds to the fragile sentiment around the euro in the longer run.

Key events in the euro area this week: Italy Industrial Production (Thursday) – Germany Final Inflation Rate (Friday).

Eminent issues on the back boiler: Continuation of the ECB hiking cycle vs. increasing recession risks. Impact of the war in Ukraine and the persistent energy crunch on the region’s growth prospects and inflation outlook.

EURUSD levels to watch

So far, the pair is retreating 0.09% at 1.0061 and a breach of 0.9730 (monthly low November 3) would target 0.9704 (weekly low October 21) en route to 0.9631 (monthly low October 13). On the other hand, initial resistance comes at 1.0096 (monthly high November 8) seconded by 1.0197 (monthly high September 12) and finally 1.0368 (monthly high August 12).