EUR/USD Forecast: Euro holds bullish bias in last week of 2023
|- EUR/USD climbed to a fresh multi-month high near 1.1050.
- The pair's technical outlook suggests that the bullish bias remains intact.
- This week's economic calendar will not offer any high-impact data releases.
EUR/USD gained traction and registered small gains on Tuesday following the Christmas holiday. The pair continued to edge higher early Wednesday and reached its highest level since August near 1.1050.
Euro price this week
The table below shows the percentage change of Euro (EUR) against listed major currencies this week. Euro was the strongest against the Japanese Yen.
| USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF | |
| USD | -0.14% | -0.09% | -0.59% | -0.52% | 0.20% | -0.52% | -0.15% | |
| EUR | 0.24% | 0.07% | -0.32% | -0.31% | 0.36% | -0.28% | 0.08% | |
| GBP | 0.23% | -0.11% | -0.21% | -0.38% | 0.28% | -0.22% | -0.18% | |
| CAD | 0.59% | 0.13% | 0.43% | -0.17% | 0.78% | 0.25% | 0.28% | |
| AUD | 0.52% | 0.31% | 0.40% | -0.07% | 0.67% | 0.04% | 0.18% | |
| JPY | -0.20% | -0.30% | -0.47% | -0.50% | -0.66% | -0.50% | -0.49% | |
| NZD | 0.52% | 0.31% | 0.42% | -0.08% | -0.04% | 0.62% | 0.40% | |
| CHF | 0.35% | -0.09% | -0.11% | -0.28% | -0.11% | 0.50% | -0.33% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).
Trading conditions are likely to remain thin for the rest of the week, making it difficult for participants to assign a near-term direction for EUR/USD. Nevertheless, the US Dollar (USD) struggles to find demand after posting large losses against its major rivals in the previous week. In case risk flows dominate the financial markets in the second half of the day, the pair is likely to keep its footing. At the time of press, US stock index futures were virtually unchanged on the day.
The US economic calendar will feature the Richmond Fed manufacturing Index for December and the weekly MBA Mortgage Applications. It would be surprising to see these data triggering a noticeable market reaction.
EUR/USD Technical Analysis
EUR/USD stays within the upper-half of the long-term ascending regression trend channel and the Relative Strength Index (RSI) indicator on the 4-hour chart holds above 60. Although these technical developments reaffirm the bullish bias, the RSI-price divergence seen on the same chart points to a loss of bullish momentum and suggests that there could be a correction before the next leg higher.
On the downside, 1.1000 (psychological level, mid-point of the ascending channel) aligns as first support before 1.0970 (50-period Simple Moving Average) and 1.0930 (static level).
In case EUR/USD stabilizes above 1.1050 (static level), it could target 1.1100 (psychological level, static level) and 1.1160 (upper limit of the ascending channel).
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