|

EUR/USD remains capped below 1.0800, Fed rate decision eyed

  • EUR/USD holds below 1.0800 on a modest US Dollar strength.
  • US Consumer Price Index (CPI) report broadly matched market expectations.
  • German ZEW Indicator of Economic Sentiment came in at 12.8 vs. 9.8 prior, above the market consensus of 8.8.
  • The Fed interest rate decision and press conference will be closely monitored by traders.

The EUR/USD pair remains capped under the 1.0800 mark during the early Asian trading hours on Wednesday. The Federal Reserve (Fed) and the European Central Bank (ECB) will announce their decisions on monetary policy on Wednesday and Thursday, respectively. At press time, the major pair is trading at 1.0792, losing 0.04% on the day.

US inflation report broadly matched market expectations, with the headline Consumer Price Index (CPI) climbing 0.1% MoM in November from 0% in October while the annual headline CPI eased from 3.2% to 3.1% in November. Additionally, the Core CPI rose to 0.3% MoM from 0.1% in the previous month. On an annual basis, the Core CPI figure grew 4.0% YoY, as expected.

The ECB is expected to leave interest rates unchanged at its December meeting on Thursday, even though eurozone inflation is falling much closer to its 2.0% target. The ECB prepared to push back market expectations for a rate cut as early as March by stating that they still see price upside risks, notably from growing wages. Last month, ECB President Christine Lagarde said that she still wanted to see clear evidence that tight labor markets were not causing another inflationary spike.

On Tuesday, the German ZEW Indicator of Economic Sentiment came in at 12.8 versus 9.8 prior, above the market consensus of 8.8 whereas the Current Situation Index fell to -77.1 from the previous reading of -79.8, below the expectation of -75.5. Furthermore, the Eurozone ZEW Economic Sentiment Index rose to 23.0 from 13.8 in the previous reading, beating the estimation of 12.0.

The market anticipates the Fed to maintain the benchmark overnight borrowing rate in a range between 5.25% and 5.5% at its December meeting on Wednesday. Additionally, the market is pricing in aggressive rate cuts, with 80% odds of a rate cut in May and continuing to cut at least a full percentage point by the end of the year, according to the CME FedWatch Tool.

Moving on, the US Producer Price Index (PPI) will be released on Wednesday ahead of the Fed interest rate decision. After the monetary policy meeting, the Fed officials will update their forecast on economic growth, inflation, and the labor market. Traders will take cues from this event and find trading opportunities around the EUR/USD pair.

EUR/USD

Overview
Today last price1.0794
Today Daily Change-0.0003
Today Daily Change %-0.03
Today daily open1.0797
 
Trends
Daily SMA201.0869
Daily SMA501.0717
Daily SMA1001.0758
Daily SMA2001.0825
 
Levels
Previous Daily High1.0828
Previous Daily Low1.076
Previous Weekly High1.0895
Previous Weekly Low1.0724
Previous Monthly High1.1017
Previous Monthly Low1.0517
Daily Fibonacci 38.2%1.0802
Daily Fibonacci 61.8%1.0786
Daily Pivot Point S11.0762
Daily Pivot Point S21.0727
Daily Pivot Point S31.0694
Daily Pivot Point R11.083
Daily Pivot Point R21.0863
Daily Pivot Point R31.0899


 

Author

Lallalit Srijandorn

Lallalit Srijandorn is a Parisian at heart. She has lived in France since 2019 and now becomes a digital entrepreneur based in Paris and Bangkok.

More from Lallalit Srijandorn
Share:

Editor's Picks

AUD/USD rises to 0.6950 as USD slips on Fed's Warsh

AUD/USD regains traction and extends the bounce toward 0.6950 in the Asian session on Friday. Fed Chair Warsh's comments reinforce the selling pressure on the US Dollar, allowing the pair to stretch higher. Warsh said that he remains committed to delivering price stability without giving away anything on future interest rate path.

USD/JPY falls in symc with USD, gives up 158.00 after Warsh's speech

USD/JPY has come under fresh selling pressure and gives up 158.00 in the Asian session on Friday amid the emergence of fresh US Dollar selling. Fed Chair Warsh's non-committal commentary on the future tightening path, weighs on the US Dollar and the pair.

Gold bounces back toward $4,200 as Warsh downs USD

Gold has changed course, bouncing back toward $4,200 in the early European morning on Friday, as the US Dollar weakens following Warsh's comments. Warsh stuck to his commitment to delivering price stability, while noting that he won't pre-judge meetings.

Bitcoin holds $80,500; Ethereum rebounds, Ripple weakens

Bitcoin (BTC), Ethereum (ETH) and Ripple (XRP) show mixed price action on Friday, with BTC and ETH holding above key support levels while XRP struggles below key resistance. Meanwhile, sticky inflation figures have dampened risk appetite, and momentum indicators for these top three cryptocurrencies have also weakened, signaling a risk of a deeper correction if key support fails to hold.

US midterms put fiscal policy under the spotlight, treasury sell-off raises risk
The US will hold its midterm elections - a de facto referendum on the Trump administration - on 3rd November after two years shaped by rising trade protectionism, attacks on Federal Reserve independence and, since the spring, the Iran war. Republicans are expected to take a heavy electoral hit.
Everyone's dumping Gold after hot US inflation. Here's why $4,100 could be a floor, not a cliff
Gold (XAU/USD) is recovering from a sharp sell-off triggered by hotter-than-expected United States (US) inflation data released on Wednesday. The precious metal briefly plunged toward $4,073 as investors increased their bets on further Federal Reserve (Fed) interest rate hikes before recovering as US Treasury yields and the US Dollar (USD) reversed their initial gains.