EUR/USD Price Forecast: Buyers maintain the pressure ahead of key central bank meetings

Valeria Bednarik FXStreet

EUR/USD Current price: 1.0524

The US Dollar falls despite risk aversion dominating financial markets.
The German IFO survey showed an upbeat Business Climate in January.
EUR/USD bullish momentum set to continue, traders aim for 1.0600.

The US Dollar (USD) is under strong selling pressure on Monday, particularly against high-yielding rivals. The EUR/USD pair trades at fresh multi-week highs in the 1.0520 region, helped by encouraging German data. The country released the January IFO survey, which showed that the Business Climate improved to 85.1 from 84.7 in December, beating the expected 84.6. The assessment of the current situation and expectations also improved by more than anticipated, printing at 86.1 and 84.2, respectively.

Other than that, the USD is weak despite a risk-averse environment, with Wall Street’s futures sharply lower. Finally, US Treasury bond yields are also down, with the 10-year note offering 4.51%, roughly 10 basis points (bps) down from last Friday.

Meanwhile, European Central Bank (ECB) President Christine Latade spoke at a Hungarian central bank conference. She did not refer to monetary policy but expressed concerns about central banks’ independence, saying it is being questioned in “several” parts of the world.”

The ECB and the Federal Reserve (Fed) will announce their decisions on monetary policy this week, with the first seen trimming rates yet the Fed holding its fire.

Data-wise, the American session will bring the December Chicago Fed National Activity Index and New Home Sales for the same month.

EUR/USD short-term technical outlook

The daily chart for the EUR/USD pair shows buyers are in full control and could push the pair further up. EUR/USD keeps advancing beyond a now flat 20 Simple Moving Average (SMA), currently consolidating at around 1.0345. Technical indicators, in the meantime, head north within positive levels without signs of upward exhaustion. Finally, a bearish 100 SMA stands at around 1.0685, providing relevant resistance should the pair extend gains.

The upward momentum is firmer in the near term, as the 4-hour chart shows technical indicators heading firmly higher within positive levels, still below overbought readings. Finally, a bullish 20 SMA extends its advance beyond directionless 100 and 200 SMAs while providing support at around 1.0445, reinforcing the relevance of the area.

Support levels: 1.0445 1.0400 1.0355

Resistance levels: 1.0520 1.0565 1.0610

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

AUD/USD edges higher as hot CPI inflation and hawkish RBA lift rate hike bets

The AUD/USD pair gathers strength to near 0.7035 during the Asian trading hours on Friday. The Australian Dollar edges higher against the US Dollar as hotter Australian CPI inflation data has bolstered expectations of Reserve Bank of Australia rate hikes.

USD/JPY meets support near 157.00

USD/JPY retreats for the third consecutive day on Friday, revisiting the 157.00 region before attempting some recovery as investors continue to assess the latest BoJ meeting, where the central bank left rates unchanged, as widely anticipated.

Gold sinks to fresh yearly lows despite risk-off mood as Fed rate hike bets weigh

Gold slips to fresh year-to-date lows on Friday. The metal struggles despite a risk-off mood across markets, as expectations of further Federal Reserve (Fed) interest rate hikes continue to dominate price action, leaving Gold on track to end the month in negative territory.

Ripple Price Forecast: XRP bulls defend $1.20 as sell-side pressure triggers liquidations

Ripple (XRP) trades around $1.25 on Friday, rising from a short-term support level established at $1.20. This minor upward correction follows a sharp sell-off, triggered amid reports of a hack attack on the Binance exchange that impacted approximately $6.3 billion. The attack drove the broader crypto market on edge, as Binance suspended both deposits and withdrawals to contain the situation.

BoJ recap: A pause for now... but Japan has entered a new inflation phase

The Bank of Japan left its short-term policy rate unchanged at 1.25% but delivered a distinctly hawkish message on the risk of an inflation overshoot. The decision passed by 8-1, with board member Takata dissenting in favour of an increase to 1.5%, while Governor Kazuo Ueda stressed that the Bank would continue adjusting policy as needed.

The 2% inflation target came from a throwaway remark. It now moves trillions

The Federal Reserve's 2% inflation goal grew out of an off-the-cuff remark by a New Zealand politician in 1988. Bond investors still price long-term US debt as if 2% holds, so a change in how the Fed measures inflation would move markets.