EUR/USD Forecast: Euro needs to reclaim 1.0450 to remain bullish


Share:
  • EUR/USD has recovered toward 1.0400 following Monday's volatile action.
  • The pair needs to stabilize above 1.0450 to keep buyers interested.
  • Eyes on German inflation data and the Conference Board's US Consumer Confidence Index.

EUR/USD has staged a rebound during the Asian trading hours but lost its traction near 1.0400. Following Monday's volatile action, the technical outlook suggests that the pair is likely to gather bullish momentum once it stabilizes above 1.0450.

Despite the risk-averse market environment, the US Dollar struggled to find demand in the first half of the day on Monday and EUR/USD reached its strongest level in five months near 1.0500. With Wall Street's main indexes suffering heavy losses after the opening bell, however, the pair came under bearish pressure and ended up closing the day in negative territory. Hawkish comments from Fed officials also provided a short-term boost to the US Dollar.  

Early Tuesday, the positive shift witnessed in risk mood seems to be helping EUR/USD cling to modest daily gains. Renewed optimism about China continuing to move away from the zero-Covid policy after Global Times commentator Hu Xijin tweeted that China may "walk out of the shadow of COVID-19 sooner than expected," allowed risk flows to return to markets.

Later in the session, the European Commission will release the business and consumer sentiment surveys for the Eurozone. More importantly, Germany's Destatis will publish the November inflation report. The Consumer Price Index (CPI) in Germany is forecast to edge lower to 10.3% on a yearly basis from 10.4% in October. In case the annual CPI continues to rise unexpectedly in November, the Euro is likely to gather strength and vice versa. While testifying before the European Parliament on Monday, European Central Bank President Christine Lagarde reiterated that interest rates will remain as their primary tool to fight inflation. 

The US economic docket will feature the Conference Board's Consumer Confidence Index for November. Nonetheless, market participants are likely to stay focused on risk perception. US stock index futures are up between 0.3% and 0.6% in the European morning and a decisive rebound in Wall Street could hurt the US Dollar, lifting EUR/USD in the American session.

EUR/USD Technical Analysis

The 20-period Simple Moving Average (SMA) on the four-hour chart aligns as interim resistance for EUR/USD ahead of 1.0450, where the ascending trend line is located. In case the pair rises above the latter and starts using it as support, it could target 1.0500 (psychological level, multi-month high set on Monday) and 1.0530 (static level).

On the downside, immediate support is located at 1.0350 (50-period SMA) before 1.0300 (static level, psychological level) and 1.0280 (100-period SMA).

Meanwhile, the Relative Strength Index (RSI) indicator stays close to 50, suggesting that EUR/USD is lacking directional momentum for the time being.

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 holds above 1.0700, eyes on Powell

EUR/USD holds above 1.0700, eyes on Powell

EUR/USD edged lower toward 1.0700 in the early European session but managed to hold above that level. As investors await speeches from ECB officials and FOMC Chairman Jerome Powell, the pair struggles to make a decisive move in either direction.

EUR/USD News

GBP/USD falls to fresh monthly low below 1.2000

GBP/USD falls to fresh monthly low below 1.2000

GBP/USD came under renewed bearish pressure and touched its lowest level in a month below 1.2000 on Tuesday. Despite the modest improvement witnessed in risk mood, the US Dollar holds its ground and weighs on the pair as focus shifts to FOMC Chairman Powell's speech.

GBP/USD News

Gold retreats below $1,870 as US yields rebound

Gold retreats below $1,870 as US yields rebound

Gold price erased its daily recovery gains and turned flat slightly below $1,870 heading into the American session. Following a downward correction earlier in the day, the benchmark 10-year US Treasury bond yield staged a rebound and caused XAU/USD to turn south ahead of FOMC Chairman Powell's speech.

Gold News

Will Bitcoin price test $20,000 again?

Will Bitcoin price test $20,000 again?

Bitcoin price shows clear signs of distribution occurring on the four-hour chart, which indicates the possibility of a trend reversal. Moreover, BTC has been consolidating for more than two weeks with no direction in sight.

Read more

Central banks, markets and the economy: Three times wrongfooted

Central banks, markets and the economy: Three times wrongfooted

In the US, financial conditions have eased in recent months and weighed on the effectiveness of the Fed’s policy tightening. Jerome Powell recently gave the impression of not being too concerned, so markets rallied.

Read more

Majors

Cryptocurrencies

Signatures