EUR/USD turns dry above 1.0400 amid quiet market mood, Eurozone Gas price structure eyed

  • EUR/USD has turned sideways above 1.0400 due to less trading activity amid Thanksgiving Day.
  • Federal Reserve is set to ditch the 75 bps rate hike measure to safeguard the economy from financial risks.
  • European Central Bank is bound to tighten policy further to slow down inflationary pressures.
  • EUR/USD is likely to remain in the grip of bulls as the risk appetite theme has not faded yet.

EUR/USD is displaying a lackluster performance in the Tokyo session after resurfacing from the critical support of 1.0382. The Euro pair is oscillating above the round-level support of 1.0400. The major is awaiting a potential trigger for a fresh impetus as the market mood is extremely quiet amid the holiday in the United States on account of Thanksgiving Day.

The USD Index (DXY) is signaling a rangebound structure after finding a cushion around 105.64. The absence of sheer trading activity has shifted currencies to the sidelines, however, the risk impulse is still bullish. S&P500 futures recorded some gains on Thursday despite the United States markets being closed. The hangover of less-hawkish commentary from Federal Reserve (Fed) policymakers is expected to remain for a while. As the Federal Reserve is highly tilted towards the alternative of decelerating the pace of interest rate hikes, the US Dollar will remain on the tenterhooks.

Meanwhile, the Euro is expected to enjoy extra gains as European Central Bank (ECB) policymakers are seeing further policy restrictions due to the absence of a peak in Eurozone Inflation.

Federal Reserve is set to ditch 75 bps rate hike culture

The United States Consumer Price Index (CPI) has already displayed signs of a slowdown in its October inflation report. This has provided an opportunity for Federal Reserve chair Jerome Powell to slow down the pace of rate hike and shifts its focus towards enlarging financial risks. Back-to-back bigger rate hikes structure by the Federal Reserve (Fed) has exposed firms to skip their monthly obligations due to higher interest payments. Also, a slowdown in the interest rate hike pace by the Federal Reserve would provide an opportunity to observe the accomplishments led by efforts made yet in cooling down inflation.

After Federal Reserve policymakers signaled that a decline in interest rate hike pace would be optimal, the US Dollar is going through a bumpy ride. The US dollar is expected to decline further to near three-month low of around 105.34. Contrary to the efficient market hypothesis, economists at ANZ Bank have considered the move an exaggerated one as headline inflation at 7.7% is still extremely far from the targeted rate of 2%.

Further policy tightening by the European Central Bank to support Euro

Persistent supply chain risks in the Eurozone after Russia’s invasion of Ukraine have accelerated inflation and deep recession risks. The Eurozone inflation has reached to 10.7% and to curtail the same, ECB Governing Council member Isabel Schnabel said on Thursday that they will probably need to raise interest rates further into restrictive territory, as reported by Reuters. European Central Bank policymaker further added that room for slowing down the pace of interest rate adjustments remains limited. And, the largest risk for central banks remains a policy that is falsely calibrated on the assumption of a fast decline in inflation.

Meanwhile, accounts of the European Central Bank's (ECB) October policy meeting revealed on Thursday indicated that a few members also voted for 50 basis points (bps) interest rate hike. The European Central Bank Governing Council believes that policy tightening could be paused in case there will be signs of a deep and prolonged recession.

A structure of price cap on Eurozone gas is awaited

European Union (EU) authorities are planning to levy a ceiling on energy prices to safeguard households from a sheer decline in their real income. In response to that, Intercontinental Exchange (ICE) has warned that the finalization of the ceiling on European gas would force energy traders to stump up an additional $33 bln in margin payments, as reported by Financial Times. Such a large increase in margin requirements could “destabilize the market”,

EUR/USD technical outlook

EUR/USD is playing with the 200-period Exponential Moving Average (EMA) at 1.0389 on a daily scale. The corrective move in the asset after printing a high of 1.0482 on November 15 to near 1.0226 has been supported by the upward-sloping trendline placed from November low at 0.9730. Going forward, potential resistances are plotted from June 27 high at 1.0615, and May 30 high at 1.0787.

The Relative Strength Index (RSI) (14) is oscillating in a bullish range of 60.00-80.00, which indicates that the upside momentum is active.


Today last price 1.0402
Today Daily Change -0.0011
Today Daily Change % -0.11
Today daily open 1.0413
Daily SMA20 1.0153
Daily SMA50 0.9956
Daily SMA100 1.0029
Daily SMA200 1.0393
Previous Daily High 1.0449
Previous Daily Low 1.0382
Previous Weekly High 1.0482
Previous Weekly Low 1.0272
Previous Monthly High 1.0094
Previous Monthly Low 0.9632
Daily Fibonacci 38.2% 1.0423
Daily Fibonacci 61.8% 1.0407
Daily Pivot Point S1 1.0381
Daily Pivot Point S2 1.0348
Daily Pivot Point S3 1.0314
Daily Pivot Point R1 1.0447
Daily Pivot Point R2 1.0481
Daily Pivot Point R3 1.0514





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 clings to recovery gains below 1.0400 ahead of German inflation

EUR/USD clings to recovery gains below 1.0400 ahead of German inflation

EUR/USD is holding onto recovery gains below the 1.0400 mark heading in early Europe. The renewed sell-off in the US Dollar amid the China reopening optimism underpins the Euro. Focus shifts to ECB-speak and Germany's inflation data. 


GBP/USD retreats from daily highs, holds above 1.2000

GBP/USD retreats from daily highs, holds above 1.2000

GBP/USD has lost its bullish momentum and retreated toward 1.2000 during the European trading hours on Tuesday. With the upbeat market mood not allowing the US Dollar to gather strength, however, the pair stays in positive territory ahead of US data, Bailey testimony.


Gold recovery needs acceptance above $1,760

Gold recovery needs acceptance above $1,760

Gold price picks up bids to reverse the previous day’s losses amid cautious optimism in the financial markets. Easing in China Covid numbers, efforts to defend reality sector join downbeat US Dollar to favor Gold buyers. Hopes of more positives from China signal further upside. 

Gold News

Can XRP price kick-start 30% upswing if China removes zero-Covid restrictions?

Can XRP price kick-start 30% upswing if China removes zero-Covid restrictions?

XRP price shows that it is taking its sweet time to overcome and sustain above a crucial resistance level. It could catalyze a quick run-up.

Read more

Hawkish Fed speak adds to macro headwinds

Hawkish Fed speak adds to macro headwinds

St. Louis Fed President James Bullard said in an online event that the Fed will need to hike rates into next year and that there is still "a ways to go" before a policy is "restrictive."

Read more