EUR/USD Forecast: Tension mounts ahead of Powell, US data
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UNLOCK OFFEREUR/USD Current Price: 1.0362
- US Federal Reserve chief Jerome Powell will speak on the economic outlook.
- Attention is on US employment-related data and the ADP survey on private job creation.
- EUR/USD recovers from near 1.0300, bulls gain ground ahead of US events.
The EUR/USD pair recovers ground on Wednesday after bottoming for the week at 1.0318 during Asian trading hours. The US Dollar lost its strength ahead of US employment-related data and a speech from Federal Reserve (Fed) Chair Jerome Powell speech. Powell is due to speak at the Hutchins Center on Fiscal and Monetary Policy on the outlook for the economy, inflation, and the changing labor market. A Q&A will follow the speech.
The better market mood helps the EUR amid news suggesting China’s government has decided to ease coronavirus-related restrictions in Zhengzhou and Guangzhou, despite striving to control new cases. The country has continued to report record daily contagions, but massive protests across the country have forced the decision.
Data-wise, European data was mixed. On the one hand, Germany reported a seasonally adjusted Unemployment Rate of 5.6% in November, worsening from the previous 5.5%. On the other hand, The Euro area Harmonized Index of Consumer Prices (HICP) rose by 10% YoY in November, according to preliminary estimates. Market participants were anticipating 10.4%, while the October HICP was confirmed at 10.6%.
The focus now shifts to the United States and the ADP survey on private job creation, which is expected to show an increase of 200K in November, slightly below the previous 239K. Later in the day, the country will release the second estimate of the Q3 Gross Domestic Product (GDP), previously estimated at 2.6%, October JOLTS Job Openings and Pending Home Sales for the same month.
EUR/USD short-term technical outlook
From a technical point of view, the EUR/USD pair daily chart shows that it keeps battling a bearish 200 Simple Moving Average (SMA), a tough bone to break, as the pair has been unable to advance beyond it since June 2021. The same chart shows that the 20 SMA keeps heading firmly north above the 100 SMA, with the latter turning modestly higher, signaling buyers’ strength. The Momentum indicator maintains its bearish slope but holds above its midline, while the Relative Strength Index (RSI) ticks higher at around 61, also reflecting increased buying interest.
Technical readings in the 4-hour chart offer a neutral-to-bullish stance, as indicators are lifeless just above their midlines. At the same time, EUR/USD develops above bullish 100 and 200 SMAs, but it is currently struggling to overcome a mildly bearish 100 SMA. The pair could shed ground in the near term if it falls below 1.0320, while chances of a bullish run will increase on a break above 1.0400.
Support levels: 1.0320 1.0285 1.0240
Resistance levels: 1.0400 1.0440 1.0480
EUR/USD Current Price: 1.0362
- US Federal Reserve chief Jerome Powell will speak on the economic outlook.
- Attention is on US employment-related data and the ADP survey on private job creation.
- EUR/USD recovers from near 1.0300, bulls gain ground ahead of US events.
The EUR/USD pair recovers ground on Wednesday after bottoming for the week at 1.0318 during Asian trading hours. The US Dollar lost its strength ahead of US employment-related data and a speech from Federal Reserve (Fed) Chair Jerome Powell speech. Powell is due to speak at the Hutchins Center on Fiscal and Monetary Policy on the outlook for the economy, inflation, and the changing labor market. A Q&A will follow the speech.
The better market mood helps the EUR amid news suggesting China’s government has decided to ease coronavirus-related restrictions in Zhengzhou and Guangzhou, despite striving to control new cases. The country has continued to report record daily contagions, but massive protests across the country have forced the decision.
Data-wise, European data was mixed. On the one hand, Germany reported a seasonally adjusted Unemployment Rate of 5.6% in November, worsening from the previous 5.5%. On the other hand, The Euro area Harmonized Index of Consumer Prices (HICP) rose by 10% YoY in November, according to preliminary estimates. Market participants were anticipating 10.4%, while the October HICP was confirmed at 10.6%.
The focus now shifts to the United States and the ADP survey on private job creation, which is expected to show an increase of 200K in November, slightly below the previous 239K. Later in the day, the country will release the second estimate of the Q3 Gross Domestic Product (GDP), previously estimated at 2.6%, October JOLTS Job Openings and Pending Home Sales for the same month.
EUR/USD short-term technical outlook
From a technical point of view, the EUR/USD pair daily chart shows that it keeps battling a bearish 200 Simple Moving Average (SMA), a tough bone to break, as the pair has been unable to advance beyond it since June 2021. The same chart shows that the 20 SMA keeps heading firmly north above the 100 SMA, with the latter turning modestly higher, signaling buyers’ strength. The Momentum indicator maintains its bearish slope but holds above its midline, while the Relative Strength Index (RSI) ticks higher at around 61, also reflecting increased buying interest.
Technical readings in the 4-hour chart offer a neutral-to-bullish stance, as indicators are lifeless just above their midlines. At the same time, EUR/USD develops above bullish 100 and 200 SMAs, but it is currently struggling to overcome a mildly bearish 100 SMA. The pair could shed ground in the near term if it falls below 1.0320, while chances of a bullish run will increase on a break above 1.0400.
Support levels: 1.0320 1.0285 1.0240
Resistance levels: 1.0400 1.0440 1.0480
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