EUR/USD Current Price: 1.0690
- Mixed United States data released on Friday put the US Dollar under selling pressure.
- Euro Zone Sentix Investor Confidence improved by less than anticipated in January.
- EUR/USD could test 1.0740, the 61.8% Fibonacci retracement of the 2022 decline.
Following Friday’s rally ahead of the weekly close, the EUR/USD pair surged to 1.0699 on Monday. The Euro benefited from a better market mood. Over the weekend, China finally re-opened sea and land crossings with Hong Kong after three years, the final pillar of the zero-covid policy. As a result, the Chinese Yuan jumped to a fresh five-month high against the US Dollar, pressuring the latter across the FX board.
Furthermore, the American Dollar eased amid renewed speculation the United States Federal Reserve (Fed) will slow the pace of rate hikes, following US data published on Friday. The ISM Services PMI plummeted into contraction territory in December, with the index down to 49.6 from 56.5 in November. At the same time, the Nonfarm Payrolls report indicated solid job creation alongside easing wage pressure.
Data-wise, Euro Zone Sentix Investor Confidence improved to -17.5 in January from -21 in December but missed expectations of -11.1. The November Unemployment Rate, on the other hand, was confirmed at 6.5%, as expected. The US macroeconomic calendar will be light, as the country will publish November Consumer Credit Change., while Federal Reserve’s Raphael Bostic will be on the wires.
EUR/USD short-term technical outlook
The EUR/USD pair is firmly up for a second consecutive day, trading around the 1.0690 level. Technical readings in the daily chart skew the risk to the upside, although the pair lacks momentum. Technical indicators hold within positive levels but without clear directional strength, while EUR/USD develops above all of its moving averages. The 20 Simple Moving Average (SMA) picks up modestly, providing dynamic support at around 1.0615.
The bullish case is firmer in the near term. The 4-hour chart shows that technical indicators picked up an upward pace within positive levels, with the Relative Strength Index (RSI) approaching overbought readings. At the same time, EUR/USD develops above its moving averages, with the 20 SMA accelerating north between the longer ones. A critical resistance level is located at 1.0740, the 61.8% retracement of the 2022 yearly decline. It seems unlikely the pair could break above it without a clear catalyst.
Support levels: 1.0660 1.0615 1.0570
Resistance levels: 1.0740 1.0785 1.0820
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
EUR/USD drops below 1.0850 as DXY extends gains
EUR/USD pulled back below 1.0850 during the American session and turned negative for the day, moving away from the three-day high it hit earlier at 1.0871. The US Dollar gained momentum in a relatively quiet session.
GBP/USD retreats further from seven-week highs toward 1.2300
GBP/USD dropped to 1.2300 after the beginning of the American session amid a stronger US Dollar. Earlier on Wednesday reached the highest level since February 2 at 1.2360. The pair holds an upward bias but bulls need above 1.2300.
Gold: XAU/USD fails to retake $1,970 Premium
Gold reversed at $1,971/oz and retreated finding support above $1,960. Higher US yields make it difficult for XAU/USD to gather strength. Also, the DXY is trading at daily highs near 102.80, adding weight to gold.
XRP Price Prediction: Whales could be expecting a 20% rally
XRP price has been rising impressively, drawing investors towards the crypto asset. However, these traders might want to brace for a potential pullback following the recent rallies despite the Ripple community preparing for a win against the SEC.
Athleisure does it again as earnings blowout send LULU up 17%
Lululemon Athletica (LULU), the only heir to Nike's (NKE) success in the athletic wear realm, reported earnings late Tuesday that show why it has remained a must-own stock despite the market tanking over the past year.