EUR/USD Current price: 1.1257

  • EU Gross Domestic Product was confirmed at 2.2% in the third quarter of the year.
  • European currencies were incapable of taking advantage of the better market’s mood.
  • EUR/USD posted a fresh December low, could fall below 1.1200.

The shared currency was among the weakest USD rivals on Tuesday, with EUR/USD falling to 1.1227, its lowest this December. The pair hovers in the 1.1250 price zone heading into the Asian opening, incapable of recovering despite the receding dollar’s demand amid prevalent optimism.

The market’s mood was optimistic amid continued speculation that the coronavirus Omicron variant is milder, so restrictive measures won’t be required. Nevertheless, it’s too early to say so, and at this point, is more hope than knowledge, although enough to keep stocks rallying. Global indexes surged while US government bond yields reached fresh weekly highs. The dollar initially advance with demand receding in the last trading session of the day.

EU data failed to impress, as the EU Q3 Gross Domestic Product was confirmed at 2.2% QoQ, while Germany Industrial Production contracted 0.6% YoY, much worse than the 8.8% advance expected. Additionally, the German ZEW Survey on Economic Sentiment improved in the country to 29.9 in December and to 26.8 for the EU, although the assessment of the current situation plummeted to -7.4 vs the 5 anticipated by markets.

As for the US, the country published the October Trade Balance, which posted a deficit of $83.2 billion. Also, Q3 Nonfarm Productivity resulted at -5.2%, while Unit Labor Costs for the same period improved to 9.6%. Wednesday’s macroeconomic calendar will be light,  with no data of interest in the EU or the US.

EUR/USD short-term technical outlook

The EUR/USD pair is down for a second consecutive day and not far from its year low at 1.1185. According to the daily chart, further slides are likely, as the pair keeps meeting sellers around a bearish 20 SMA, while technical indicators resumed their declines within negative levels.

In the near term, and according to the 4-hour chart, the risk is skewed to the downside. The Momentum indicator keeps heading south below its midline, while the RSI consolidates around 34, reflecting prevalent selling interest. Meanwhile,  the 20 and 100 SMAs maintain their bearish slopes, converging at around 1.1300. The pair is poised to test the 1.1200 level, while a break below it exposes the 1.1160 price zone, where the pair bottomed on June 2020.

Support levels: 1.1200 1.1165 1.1120

Resistance levels: 1.1275 1.1310 1.1345  

View Live Chart for the EUR/USD

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.

Feed news

Latest Forex Analysis

Latest Forex Analysis

Editors’ Picks

EUR/USD accelerates slump, approaches 0.1300

The shared currency is among the weakest dollar’s rivals. EUR/USD trades around 1.1320 and is near its weekly low. Elsewhere, the greenback weakened after soft US employment-related figures and as stocks rallied.


GBP/USD holds above 1.3600 as dollar fails to capitalize on US data

GBP/USD tested 1.3600 earlier in the day but managed to stage a recovery in the early American session. The greenback is having a hard time gathering strength as investors assess the mixed macroeconomic data releases from the US.


Gold bulls looking for a re-test of November high at 1,877.15

Gold resumed its advance after a short-lived consolidative stage, reaching a fresh two-month high of $1,847.92 a troy ounce. The dollar came under renewed selling pressure after the US released mixed economic figures.

Gold News

Decentraland holds support but MANA may return to $2

Decentraland price action is, at present, very indecisive. However, while the overall outlook is bearish – especially within the Ichimoku Kinko Hyo system, there is evidence that a turnaround to the upside may be coming soon.

Read more

When real rates are negative for a sustained period, is it a sign of looming recession?

We agree that inflation should moderate this year due to the money side of things, but worry that monetary policy is powerless against most of the supply chain issues, commodity prices, greedy consumer goods companies, and that weird labor shortage.

Read more