EURUSD Ready for the big short towards 1.089
Updated
The EUR/USD experienced a decline after four consecutive days of gains, stabilizing just below 1.1000, while the US Dollar seeks to recover. On Thursday, Eurozone inflation data could disappoint expectations downward, while the US will release the core PCE index and weekly jobless claims. A daily close well above 1.1010 could pave the way for further gains. A decisive break below 1.0960 would indicate further losses, with the next support at 1.0920, near an upward trendline. Key resistance is at 1.1000, while additional recent highs could lead to resistance at 1.1070. The inflation situation in Europe indicates a slowdown, with German and Spanish data falling below expectations. Overall, the positive trend of the ECB may be influenced by additional inflation data. The US economy showed stronger growth in the third quarter than previously estimated, bolstering the Dollar. On Thursday, US data on Core Personal Consumption Expenditures (PCE) and weekly jobless claims could further influence the Dollar, especially if they highlight further slowing of inflation and the labor marke
Note
The EUR/USD recently reached a new three-month high at 1.1016 but struggled to sustain this level, experiencing a retreat below 1.1000 despite a general risk appetite. In Europe, inflation has further decreased, with Germany and Spain reporting rates below market expectations. U.S. economic data shows a stronger growth in the third quarter, but subsequent reports suggest a slowdown in economic activity. The U.S. dollar remains vulnerable awaiting the upcoming economic data. Bond yields have decreased on both sides of the Atlantic, with the most pronounced decline in Germany. If inflation in the Eurozone confirms the data from Germany and Spain, it could fuel speculation about possible interest rate cuts by the ECB. However, ECB officials are cautious and may require additional data before adopting accommodative measures. Despite the recent downside correction in the EUR/USD, the trend remains bullish, but the Relative Strength Index suggests a possible consolidation. A breakthrough of 1.1010 could indicate further gains, while a break below 1.0960 could lead to additional losses, with the next support at 1.0925. The main resistance is at 1.1000, with a subsequent level at 1.1050 above recent highs.
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