EUR/USD Forecast: Consolidating gains above 1.0400 ahead of US first-tier data
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UNLOCK OFFEREUR/USD Current Price: 1.0452
- S&P Global downwardly revised the Manufacturing PMIs for the Euro Area.
- The United States will publish the Federal Reserve’s favorite inflation gauge.
- EUR/USD could break above 1.0500 ahead of the weekend as bullish signs pile up.
The EUR/USD pair trades well above the 1.0400 threshold, extending gains amid the broad US Dollar weakness. The pair hit an intraday high of 1.0463 early in the European session, easing modestly ahead of the release of critical United States data. Meanwhile, news that China is pivoting on its zero-Covid policy brought relief to financial markets, underpinning the EUR.
US Federal Reserve (Fed) Chair Jerome Powell triggered the US Dollar decline as he dropped the hawkish rhetoric on monetary policy, speaking at a private event. Among other things, Powell acknowledged that moderating the pace of rate hikes is the path to take and may come as soon as December, as progress towards “sufficiently restrictive” police has already been made.
Despite discouraging news for the EUR, the upbeat mood keeps the pair afloat. German Retail Sales fell by 2.8% MoM in October, much worse than anticipated. Additionally, S&P Global released the final versions of its November Manufacturing PMIs, which were downwardly revised. The German index was confirmed at 46.2, while the Euro Area one came down to 47.1 from the previously estimated 47.3.
Market players are now waiting for the US Personal Consumption Expenditures (PCE) Price Index data, the Federal Reserve’s preferred inflation gauge, and the Institute of Supply Management (ISM) November´s Manufacturing PMI. Core PCE inflation, which excludes volatile food and energy prices, is expected to have risen by 0.3% MoM, while the annual reading is foreseen at 5%, easing from 5.1% in October. On the other hand, the ISM Manufacturing PMI is expected to have fallen into contraction territory, from 50.2 in October to 49.8.
EUR/USD short-term technical outlook
The EUR/USD pair daily chart shows that the pair has advanced above its 200 Simple Moving Average (SMA), while the 20 SMA accelerated north below the longer one, reflecting increased buying interest. The Momentum indicator keeps heading lower within positive territory amid a weak daily opening, while the Relative Strength Index (RSI) consolidates at around 64. Overall, the risk is skewed to the upside, although the pair needs to clear its recent high at 1.0496 to confirm a sustainable rally.
The 4-hour chart favors another leg higher, although additional confirmations are needed. The pair is developing above all of its moving averages, with the 20 SMA picking up above bullish longer ones. Technical indicators, however, have lost their directional strength and stand pat within positive levels. Whether EUR/USD can storm through 1.0500 will depend on the upcoming US first-tier figures.
Support levels: 1.0400 1.0360 1.0315
Resistance levels: 1.0465 1.0500 1.0540
EUR/USD Current Price: 1.0452
- S&P Global downwardly revised the Manufacturing PMIs for the Euro Area.
- The United States will publish the Federal Reserve’s favorite inflation gauge.
- EUR/USD could break above 1.0500 ahead of the weekend as bullish signs pile up.
The EUR/USD pair trades well above the 1.0400 threshold, extending gains amid the broad US Dollar weakness. The pair hit an intraday high of 1.0463 early in the European session, easing modestly ahead of the release of critical United States data. Meanwhile, news that China is pivoting on its zero-Covid policy brought relief to financial markets, underpinning the EUR.
US Federal Reserve (Fed) Chair Jerome Powell triggered the US Dollar decline as he dropped the hawkish rhetoric on monetary policy, speaking at a private event. Among other things, Powell acknowledged that moderating the pace of rate hikes is the path to take and may come as soon as December, as progress towards “sufficiently restrictive” police has already been made.
Despite discouraging news for the EUR, the upbeat mood keeps the pair afloat. German Retail Sales fell by 2.8% MoM in October, much worse than anticipated. Additionally, S&P Global released the final versions of its November Manufacturing PMIs, which were downwardly revised. The German index was confirmed at 46.2, while the Euro Area one came down to 47.1 from the previously estimated 47.3.
Market players are now waiting for the US Personal Consumption Expenditures (PCE) Price Index data, the Federal Reserve’s preferred inflation gauge, and the Institute of Supply Management (ISM) November´s Manufacturing PMI. Core PCE inflation, which excludes volatile food and energy prices, is expected to have risen by 0.3% MoM, while the annual reading is foreseen at 5%, easing from 5.1% in October. On the other hand, the ISM Manufacturing PMI is expected to have fallen into contraction territory, from 50.2 in October to 49.8.
EUR/USD short-term technical outlook
The EUR/USD pair daily chart shows that the pair has advanced above its 200 Simple Moving Average (SMA), while the 20 SMA accelerated north below the longer one, reflecting increased buying interest. The Momentum indicator keeps heading lower within positive territory amid a weak daily opening, while the Relative Strength Index (RSI) consolidates at around 64. Overall, the risk is skewed to the upside, although the pair needs to clear its recent high at 1.0496 to confirm a sustainable rally.
The 4-hour chart favors another leg higher, although additional confirmations are needed. The pair is developing above all of its moving averages, with the 20 SMA picking up above bullish longer ones. Technical indicators, however, have lost their directional strength and stand pat within positive levels. Whether EUR/USD can storm through 1.0500 will depend on the upcoming US first-tier figures.
Support levels: 1.0400 1.0360 1.0315
Resistance levels: 1.0465 1.0500 1.0540
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