EUR/USD Forecast: Euro picks up with encouraging German inflation gauges
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UPGRADEEUR/USD Current price: 1.0982
- German inflation eased further in November, according to the preliminary estimate of the HICP.
- ECB Governing Council member Yannis Stournaras hints at rate cuts mid-2024.
- EUR/USD aims to regain the upside in the near term, needs to accelerate through 1.1000.
The EUR/USD pair eased from 1.1016, its highest since last August, trading a handful of pips below the 1.1000 threshold ahead of Wall Street’s opening. The US Dollar plummeted on Tuesday following dovish comments from US Federal Reserve (Fed) officials, introducing rate cuts in their comments for the first time.
Across the pond, European Central Bank (ECB) Governing Council member Yannis Stournaras also discussed the subject on Wednesday, warning about premature bets on rate cuts but adding he would expect such a move in mid-2024. Earlier than that could be a bit optimistic, according to Stournaras.
Germany published the preliminary estimate of the November Harmonized Index of Consumer Prices (HICP), which resulted in softer-than-anticipated. The annual inflation figure printed at 2.3%, below the 2.7% anticipated by market players and easing from the previous 3%. The EUR/USD pair ticked higher with the news.
Coming up next, the United States will unveil a revision of the Q3 Gross Domestic Product (GDP), the October Goods Trade Balance, and Wholesale Inventories for the same month. The American afternoon will feature Fed speakers, with more dovish comments likely to weigh heavily on the USD.
EUR/USD short-term technical outlook
From a technical point of view, EUR/USD is bullish, although the momentum eases. The daily chart shows that the pair holds well above all its moving averages, with the 20 Simple Moving Average (SMA) crossing above directionless 100 and 200 SMAs well below the current level, reflecting strong buying interest. Meanwhile, technical indicators stand near overbought readings with uneven strength, giving the first signs of upward exhaustion yet to be confirmed.
The near-term picture favors another leg north. Technical indicators in the 4-hour chart are picking up within positive levels and after correcting overbought conditions. At the same time, a bullish 20 SMA converges with the 61.8% Fibonacci retracement of the 1.1275/1.0447 slide at 1.0960, reinforcing the static support level. Finally, the longer moving averages maintain their bullish slopes, far below the shorter one.
Support levels: 1.0960 1.0920 1.0880
Resistance levels: 1.1010 1.1050 1.1090
EUR/USD Current price: 1.0982
- German inflation eased further in November, according to the preliminary estimate of the HICP.
- ECB Governing Council member Yannis Stournaras hints at rate cuts mid-2024.
- EUR/USD aims to regain the upside in the near term, needs to accelerate through 1.1000.
The EUR/USD pair eased from 1.1016, its highest since last August, trading a handful of pips below the 1.1000 threshold ahead of Wall Street’s opening. The US Dollar plummeted on Tuesday following dovish comments from US Federal Reserve (Fed) officials, introducing rate cuts in their comments for the first time.
Across the pond, European Central Bank (ECB) Governing Council member Yannis Stournaras also discussed the subject on Wednesday, warning about premature bets on rate cuts but adding he would expect such a move in mid-2024. Earlier than that could be a bit optimistic, according to Stournaras.
Germany published the preliminary estimate of the November Harmonized Index of Consumer Prices (HICP), which resulted in softer-than-anticipated. The annual inflation figure printed at 2.3%, below the 2.7% anticipated by market players and easing from the previous 3%. The EUR/USD pair ticked higher with the news.
Coming up next, the United States will unveil a revision of the Q3 Gross Domestic Product (GDP), the October Goods Trade Balance, and Wholesale Inventories for the same month. The American afternoon will feature Fed speakers, with more dovish comments likely to weigh heavily on the USD.
EUR/USD short-term technical outlook
From a technical point of view, EUR/USD is bullish, although the momentum eases. The daily chart shows that the pair holds well above all its moving averages, with the 20 Simple Moving Average (SMA) crossing above directionless 100 and 200 SMAs well below the current level, reflecting strong buying interest. Meanwhile, technical indicators stand near overbought readings with uneven strength, giving the first signs of upward exhaustion yet to be confirmed.
The near-term picture favors another leg north. Technical indicators in the 4-hour chart are picking up within positive levels and after correcting overbought conditions. At the same time, a bullish 20 SMA converges with the 61.8% Fibonacci retracement of the 1.1275/1.0447 slide at 1.0960, reinforcing the static support level. Finally, the longer moving averages maintain their bullish slopes, far below the shorter one.
Support levels: 1.0960 1.0920 1.0880
Resistance levels: 1.1010 1.1050 1.1090
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