Share:
  • The US Dollar Index rose to two-week highs despite mixed US data.
  • The EUR/USD fell for the fifth consecutive day, to test the 100-day SMA.
  • Bearish bias will remain in place while under 1.0915. 

The EUR/USD dropped again and extended the correction from above 1.1000, consolidating below the 20-day Simple Moving Average (SMA). This move was driven by a stronger US Dollar, which rose despite mixed US data and lower Treasury yields.

European Central Bank (ECB) Isabel Schnabel stated on Wednesday that inflation is falling more rapidly than expected, indicating that another rate hike is unlikely. Market participants share this view and are now anticipating a rate cut by the March meeting. Eurozone data revealed that the Producer Price Index (PPI) declined by 9.4% in October compared to the previous year, lower than the 12.4% recorded in September. The final release of the Eurozone (EZ) November Service PMIs showed an upward revision. A report from the ECB indicated that one-year inflation expectations remained stable at 4.0%. On Thursday, Eurozone retail sales data for October will be released.

The decline in EUR/USD was driven by a stronger US Dollar, despite the larger-than-expected decline in the JOLTs Job Openings, which suggests a more balanced labor market. The ISM Services PMI rose to 52.7 in November, surprising expectations. With inflation slowing down and a less tight labor market, the Federal Reserve (Fed) is perceived to have completed its tightening cycle. Market participants anticipate rate cuts in 2024, although this is not currently suggested by Fed officials. On Wednesday, the ADP Employment Report will be released.

EUR/USD short-term technical outlook

The EUR/USD found support at the 100-day SMA at 1.0775. The mentioned line is being challenged, and a daily close well below would indicate further weakness. The price is already below the 20 and 200-day SMAs. Technical indicators in the daily chart continue to favor the downside. Below 1.0770, the next critical support stands at 1.0690 (uptrend line, 55-day SMA).

In the 4-hour chart, the pair is moving with a bearish bias. Technical indicators are at oversold levels, suggesting some consolidation ahead before a potential leg lower. The strong negative momentum in the short term is likely to persist while below 1.0850. For a negative short bias to be reversed, the Euro must rise and stay above 1.0915.

View Live Chart for the EUR/USD

 

Share: Feed news

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.

Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended Content


Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended Content

Editors’ Picks

EUR/USD stabilizes above1.0800, looks to post weekly gains

EUR/USD stabilizes above1.0800, looks to post weekly gains

EUR/USD continues to trade in a tight channel above 1.0800 in the second half of the day on Friday, as the improving risk mood makes if difficult for the USD to gather strength. The pair remains on track to snap a five-week losing streak.

EUR/USD News

GBP/USD clings to modest daily gains above 1.2650

GBP/USD clings to modest daily gains above 1.2650

GBP/USD trades in positive territory above 1.2650 in the American session on Friday. The bullish opening in Wall Street doesn't allow the USD to gather strength and helps the pair stay on track to close higher for the fifth consecutive day.

GBP/USD News

Gold holds steady above $2,020 as US yields edge lower

Gold holds steady above $2,020 as US yields edge lower

Gold regained its traction and stabilized above $2,020 after falling below this level during the European trading hours. The benchmark 10-year US Treasury bond yield is down nearly 1% on the day below 4.3%, allowing XAU/USD to keep its footing heading into the weekend.

Gold News

Ethereum price risks decline as increasing exchange supply raises chances of profit taking

Ethereum price risks decline as increasing exchange supply raises chances of profit taking

Ethereum price crossed $3,000 several times this week but the altcoin failed to sustain above this key level, raising concerns regarding its price trend. ETH price faces the risk of decline as the supply of the altcoin on exchanges is on the rise. 

Read more

Up go stocks, down go bonds

Up go stocks, down go bonds

We knew that yesterday was going to be a good day – at least for the stock markets, given that Nvidia defied the expectations that it would - maybe – fail to deliver $20bn sales in the latest quarter. 

Read more

Majors

Cryptocurrencies

Signatures