EUR/USD Current Price: 1.0299
- Market players await the FOMC Meeting Minutes to be out on Wednesday.
- European Central Bank officials keep paving the way for a 75 bps hike in December.
- EUR/USD aims marginally higher at the end of the day, needs to clear 1.0305.
The EUR/USD pair posted a modest advance on Tuesday, hovering around the 1.0300 threshold ahead of the US close. The greenback pared gains amid the better tone of global equities, as despite concerning Covid figures coming from China, the country’s government has maintained a light approach to restrictions. Nevertheless, concerns remain about a global economic downturn triggered by the world’s second-largest economy.
Different European Central Bank officials were on the wires, most of them paving the way for another 75 bps rate hike at the December meeting, but the EUR showed little reaction to the news. Federal Reserve representatives also had some things to say. Cleveland Federal Reserve President Loretta Mester noted that expectations for longer-term inflation are reasonably anchored, although wage growth is still lagging below inflation in most sectors. Finally, she added that labor demand outpaces worker supply.
On the data front, the ECB published the September Current Account for the Eurozone, which posted a seasonally adjusted deficit of €8.06 billion, much better than the previous contraction of €26.9 billion. Meanwhile, the preliminary estimate of November Consumer Confidence for the Euro Area came in better than anticipated at -23.9, down from the previous -27.6.
On Wednesday, the macroeconomic calendar will be much busier. S&P Global will publish the preliminary estimates of its November PMIs, with German and Eurozone services and manufacturing output foreseen to contract even further. US indexes are also seen contracting from their October final readings. The US will also publish October Durable Goods Orders, expected to have increased by 0.4% MoM. Finally, in the American afternoon, the FOMC will release the Minutes of its latest meeting. Market players will be looking for hints on the December decision after Chief Jerome Powell's surprising hawkish words.
EUR/USD short-term technical outlook
The EUR/USD pair daily chart shows that the euro retains modest intraday gains and that bulls may give it another try. The 20 SMA keeps heading north above a flat 100 SMA, while the 200 SMA maintains its bearish slope well above the current level. Technical indicators, on the other hand, had pared their declines and aim to regain the upside near overbought readings. To confirm a new leg north, the pair needs to break above 1.0305, the 23.6% retracement of the 0.9729/1.0480 rally, the immediate resistance level.
The 4-hour chart shows that a bearish 20 SMA converges with the aforementioned Fibonacci resistance level while the longer ones maintain their upward slopes far below the current price. Technical indicators offer no clues as they remain directionless within negative levels. The bearish case will be firmer if the pair changes course and falls below 1.0190, the 38.2% retracement of the mentioned rally.
Support levels: 1.0225 1.0190 1.0145
Resistance levels: 1.0305 1.0350 1.0395
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.