• EUR/USD seesaws around two-month high, pares heaviest daily jump since early December.
  • US inflation matched forecasts in December, favoring chatters of less fuel for Fed hawks.
  • ECB policymakers stay hopeful despite virus woes, citing mixed concerns over inflation.
  • A slew of ECB, Fed members up for speaking today, US PPI, Jobless Claims are important too.

EUR/USD hangs in balance around the highest levels since mid-November during the early Thursday morning in Europe.

The major currency pair jumped the most in five weeks the previous day as the US dollar slumped to a multi-day low as the inflation data matched forecasts, triggering market challenges that the Fed hawks will have less ammunition when they meet on January 25-26.

That said, the US Consumer Price Index (CPI) jumped to the highest levels since 1982 while matching 7.0% YoY forecasts, up from 6.8% previous readouts. The monthly figures rose to 0.5% versus 0.4% expected but softened below 0.8% prior.

However, the Fed policymakers reiterated their bullish bias following the inflation data release, which in turn has been challenging EUR/USD bulls of late. Federal Reserve Bank of St. Louis President James Bullard was the first among them who said, per Wall Street Journal (WSJ), “Four rate hikes in 2022 now appear to be on the table and, in the face of high inflation, a rate hike in March seems likely.”

Following that, a member of the Fed Board of Governors and incoming Vice Chairman of the FOMC Lael Brainard also mentioned, “Inflation control is Fed's most important task,” whereas President and CEO of the Federal Reserve Bank of San Francisco Mary Daly signaled a rate hike as early as March.

On the other hand, European Central Bank (ECB) policymaker Francois Villeroy de Galhau said, “We are very near to the peak in inflation.” It’s worth noting that the Eurozone Industrial Production jumped 2.3% MoM in November versus 0.5% forecasts and -1.3% revised prior.

Given the recently escalating pressure on the Fed policymakers, the bond yields are consolidating the previous losses, which in turn challenge the equity futures and riskier assets. However, a slew of policymakers from the European Central Bank (ECB) and the Fed are up for speaking on Thursday, which in turn will offer an active day for the EUR/USD traders. In addition to the monetary policy signals, the US Producer Price Index (PPI) for December and weekly jobless claims, as well as European Economic Bulletin, will also direct short-term pair moves.

To sum up, the recent inflation data solidifies the ECB v/s Fed drama even as the Fed has an upper hand over the bloc’s central bank. As a result, the EUR/USD prices may witness a pullback should the balance tilt in favor of the Fed hawks.

Technical analysis

A clear upside break of a descending trend line from May, around 1.1410 by the press time, joins bullish MACD signals to direct buyers towards the 100-DMA level of 1.1510.

Additional important levels

Overview
Today last price 1.1444
Today Daily Change -0.0006
Today Daily Change % -0.05%
Today daily open 1.145
 
Trends
Daily SMA20 1.1325
Daily SMA50 1.1339
Daily SMA100 1.1513
Daily SMA200 1.1736
 
Levels
Previous Daily High 1.1453
Previous Daily Low 1.1355
Previous Weekly High 1.1379
Previous Weekly Low 1.1272
Previous Monthly High 1.1386
Previous Monthly Low 1.1222
Daily Fibonacci 38.2% 1.1415
Daily Fibonacci 61.8% 1.1392
Daily Pivot Point S1 1.1385
Daily Pivot Point S2 1.1321
Daily Pivot Point S3 1.1287
Daily Pivot Point R1 1.1484
Daily Pivot Point R2 1.1517
Daily Pivot Point R3 1.1582

 

 

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 Join Telegram

Recommended content


Recommended content

Editors’ Picks

EUR/USD retreats toward 1.0550 as dollar rebounds

EUR/USD retreats toward 1.0550 as dollar rebounds

EUR/USD has lost its traction in the American session and retreated to the 1.0550 area. In the absence of high-tier macroeconomic data releases, the dollar is staging a rebound with the US Dollar Index rising above 103.00 and forcing the pair to edge lower.

EUR/USD News

GBP/USD consolidates its weekly gains below 1.2500

GBP/USD consolidates its weekly gains below 1.2500

GBP/USD has extended its sideways grind below 1.2500 into the second half of the day on Friday with the dollar staying resilient against its rivals. Nevertheless, the pair remains on track to snap a four-week losing streak.

GBP/USD News

Gold loses traction, drops below $1,840

Gold loses traction, drops below $1,840

Gold came under modest bearish pressure in the American session on Friday and dropped below $1,840. The benchmark 10-year US Treasury bond yield stays quiet above 2.8%, helping XAU/USD limit its losses ahead of the weekend.

Gold News

Bitcoin price will bounce to $36,000, but what happens next will leave you shocked

Bitcoin price will bounce to $36,000, but what happens next will leave you shocked

A brief technical and on-chain analysis on Bitcoin price. Here, analysts evaluate where BTC could be heading next. Does the possibility for a cat bounce make sense?

Read more

PANW shows bullish reversal chart pattern after earnings beat

PANW shows bullish reversal chart pattern after earnings beat

PANW stock benefits from continued strong revenue growth. Palo Alto Networks now nearly services half of the Global 2000. PANW stock is showing a bullish reversal pattern on its daily chart.

Read more

Forex MAJORS

Cryptocurrencies

Signatures