- EUR/USD seems to have steadied around 1.1300 ahead of key data releases.
- Shared currency could find demand on a hot inflation report.
- March Fed rate hike bets retreated toward 60% ahead of US jobs report.
EUR/USD has managed to shake off the bearish pressure and steadied around 1.1300 early Friday as investors stay on the sidelines while awaiting high-tier data releases. Eurostat will release the preliminary December Consumer Price Index (CPI) figures before the US Bureau of Labor Statistics publishes the December Nonfarm Payrolls (NFP) report later in the day.
Several European Central Bank (ECB) policymakers voiced their concerns over inflation staying high for longer than anticipated in the past couple of weeks. The market expectation points to a Core CPI reading of 2.5% on a yearly basis in December, down from 2.6% in November. The annual CPI is forecast to edge lower to 4.7% from 4.9%.
In case the data reveal stronger-than-expected inflation in the euro area, the shared currency could stay resilient against its rivals on the possibility of the ECB acting quicker to pull monetary support in the face of persistent price pressures.
Nonetheless, the market reaction to the US December jobs report is likely to be more significant than the EU inflation data.
After the FOMC's December policy meeting minutes showed that policymakers were planning to start balance sheet reduction after the first rate hike, 10-year US Treasury bond yield jumped to its strongest level since March. More importantly, the odds of a rate hike in March rose above 70%, according to the CME Group's FedWatch Tool. Currently, the March rate increase probability stands at 63%. A bigger-than-forecast increase in December NFP could ramp up rate hike chances and allow the greenback to end the week on a firm footing against its peers.
Nonfarm Payrolls Preview: A strengthening labor market backs a tighter monetary policy.
EUR/USD Technical Analysis
EUR/USD's near-term technical picture shows that the pair is struggling to find direction with the Relative Strength Index (RSI) indicator moving sideways near 50 on the four-hour chart. Moreover, the pair is currently fluctuating in a tight range in between the 100-period and 200-period SMA's on the same chart, reflecting its indecisiveness.
In case US T-bond yields start to push higher after NFP data, the first target on the downside aligns at 1.1270 (static level) ahead of 1.1240 (static level) and 1.1200 (psychological level).
Resistances are located at 1.1320 (50-period SMA), 1.1340 (static level) and 1.1360 (static level, post-ECB high).
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 rises toward 1.0800 as USD weakens
EUR/USD has gained traction and advanced toward 1.0800 in the early American session on Monday. The positive opening witnessed in Wall Street makes it difficult for the US Dollar to find demand and helps the pair continue to push higher.
GBP/USD closes in on 1.2300 as mood improves
GBP/USD has preserved its bullish momentum and advanced to the 1.2300 area in the second half of the day on Monday. The risk positive market atmosphere makes it difficult for the US Dollar to stay resilient against its rivals and fuels the pair's daily rally. Eyes on BOE Governor Bailey's speech.
Gold: XAU/USD pared losses and consolidates around $1,950.00 Premium
Spot gold trades in the $1,950 price zone, sharply down on Monday as investors move away from safe-haven assets. The sentiment is positive at the start of the week amid easing concerns related to a global banking crisis.
Four reasons why SUSHI holders will have a bullish week despite SEC's move
SushiSwap price undid the early March gains in the last week after the SEC subpoenaed the platform’s head chef Jared Grey. As a result of this announcement, the token collapsed by roughly 18%.
Alibaba (BABA) edges higher after Jack Ma returns to China for AI talk
BABA shareholders begin the week with a glimmer of hope after founder Jack Ma was seen visiting China after spending more than one year abroad. The report originally led to Alibaba's shares in Hong Kong rising 4% before subsiding.