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EUR/USD Trims Fed-inspired Gains After ECB DecisionThe EUR/USD pair erased a significant part of Wednesday’s Fed-induced rally as European Central Bank’s (ECB) President Christine Lagarde delivered a cautious press conference, which weighed on the euro. At the time of writing, the EUR/USD trades at the 1.0915 area, posting a 0.65% daily loss, after printing its highest level in nine months at 1.1085. At the same time, the U.S. dollar managed to stage a noticeable rebound as its DXY index gains 0.5%, around 101.70. The ECB decided to raise its main interest rates by 50 bps, being the highest level since November 2008 for the deposit facility rate, which now stands at 2.5%. The monetary policy statement confirmed another 50 bp hike in March, but during the press conference, Lagarde only committed to a “strong intent” and limited the hawkish tone. A dovish tilt was also perceived as the inflation risk was described as more balanced, with the consumer inflation coming down from cycle highs while economic activity is doing better than expected. On the other hand, the dollar recovered across the board on Thursday, trimming post-Fed losses. At the same time, markets continued to cheer Jerome Powell’s confirmation that the disinflationary process has begun as U.S. bond yields continued to fall, although they ended the day away from lows, while the Wall Street indexes extended gains except for the Dow Jones that closed nearly flat. On Friday, the nonfarm payrolls report will be release, with expectations pointing to a 185,000 job increase in January. From a technical standpoint, the EUR/USD maintains the short-term bullish bias, with the price hovering near multi-month highs and above its main moving averages, while indicators remain in positive territory despite losing some bullish momentum. On the upside, the following resistance levels are seen at 1.1035 and the 1.1085 high, followed by the 1.1100 psychological area. On the flip side, support levels could be found at 1.0880, and the 20-day simple moving average at 1.0832.
by Alex_Boltyan_FXAnalyst
2
EURGBP - WEURGBP Another double bottom + TL as support! We could go further and add various other confluences but what's really important to implement your own trade plan in this idea! Double bottom, support 0.88350 areas. Drop below further than that, then I would re-think this idea. Overall stay above the support of 0.88350 and break of the key resistance that has been tested multiple times 0.88950 it's strong resistance but a break above I expect 0.89820 areas to be target. We do have ECB & BOE today... Have a great day ahead, Trade Journal
by Trade_Journal
EURCAD: Testing Strong Resistance Before FED & ECB DecisionsThe EURCAD currency pair has been in an uptrend recently, but price has faced resistance and has failed to break through it. As traders, it's important to keep a close eye on key levels, such as the trendline and the dotted support line, to determine the next potential move in the market. With the upcoming Federal Reserve rate decision, traders are advised to wait before entering any new positions. The Federal Reserve is widely expected to make an announcement on monetary policy, which could impact the EURCAD and other currency pairs. It's also important to note that the European Central Bank is scheduled to announce its monetary policy decision just a day after the Federal Reserve, which could also have a significant impact on the EURCAD. This means that traders should be extra cautious and manage their positions carefully after the Federal Reserve rate decision. In conclusion, the EURCAD is in an uncertain state and traders should wait for the outcome of the Federal Reserve and ECB rate decisions before making any new moves. Stay vigilant, stay informed, and good luck in your trading endeavors!
Short
by natron
2
EURUSD Alert: RSI Divergence and Upcoming Rate DecisionsThe EURUSD has been on an upward trajectory for quite some time now, but the recent price action on the 4-hour chart has raised some concerns. A RSI divergence has been observed, which is usually a bearish signal. As a result, caution is advised for traders who are currently holding long positions in the pair. The upcoming rate decisions from both the Federal Reserve and the European Central Bank are likely to have a significant impact on the EURUSD. The FED is expected to raise interest rates by 25 basis points, while the ECB is expected to raise rates by 50 basis points. These rate hikes will have a direct impact on the strength of the US dollar and the euro, respectively. It's important to keep a close eye on the trendline and support levels that have been drawn up on the chart. If the price of the EURUSD bounces off the support level, it could indicate a continuation of the uptrend. However, if the price breaks below the support level, it could lead to further downside. In conclusion, the EURUSD is facing some uncertainty in the short term due to the upcoming rate decisions and the bearish signal on the 4-hour chart. Traders should stay vigilant and closely monitor the trendline and support levels to make informed trading decisions. With the FED expected to raise rates by 25 basis points and the ECB expected to raise rates by 50 basis points, the next few days could be critical for the EURUSD. Good luck traders! Check out my previous post "Breaking Down The FX Market: What You Need To Know" for a comprehensive video analysis.
by natron
1
EUR/USD inches closer to 1.10 ahead of FOMC and ECBWe are heading into a potentially very volatile 24-hour period, with the Fed set to kick things off today, before the BoE and ECB make their policy decisions on Thursday. The EUR/USD and GBP/USD will thus be in focus. The trend for both remains bullish heading into these central bank meetings, but let’s focus on the EUR/USD here. All eyes on Jay Powell and FOMC The EUR/USD has remained inside a tight range over the past several days, with 1.0900 area offering resistance and 1.0800 support. Ahead of the FOMC, it has tried to break away above 1.09 handle, although the bullish momentum has understandably been weak with most traders sitting on their hands until the Fed decision is out of the way. I think there is a good chance we could see a bullish break out soon with 1.1000 likely to be the main short-term objective, owing to further weakness in US data. But on FOMC days, there’s usually a bit of volatility before the trend resumes. So, don’t dismiss the potential for another dip before the resumption of the bullish trend. The FOMC is expected to reduce the pace of hiking further, to 25 basis points at the conclusion of its meeting today. The policy statement will be released at 19;00 GMT, with Jay Powell’s presser to start half an hour later. The Fed Chair is likely to keep further hikes on the table and lean against bets they will cut later this year, something which may get interpreted as being hawkish. But as we have seen in recent Fed meetings, the market has been quick to dismiss the Fed’s hawkishness and price in a lower terminal interest rate. Are we going to see a similar response this time, too? More signs of weakening US economy Well, the weakness in US data continued today, with the ADP payrolls printing its lower number since last January at 106K vs. 170K eyed. On top of this, the ISM manufacturing PMI fell deeper in the contraction territory, printing 47.4 vs. 48.0 expected and 48.4 last. Worryingly, new orders contracted at a faster pace too, printing 42.5 vs. 45.1 in December. Employment in the sector declined. Today’s weaker ADP and ISM data follow several other weaker-than-expected data on Tuesday, all helping to re-enforced expectations that the Fed will be more inclined to stop its hiking cycle sooner. Employment Cost Index, a key measure of wage inflation, rose by 1% q/q, which was weaker than expected, while the latest Chicago PMI reading (44.3 vs. 45.1 expected) and CB Consumer Confidence index (107.1 vs. 109.1 expected) both also disappointed. Focus will turn to ECB next The European Central Bank is set to hike interest rates by 50 basis points on Thursday, lifting the Main Refinancing Rate to 3.0% from 2.5% currently. While this is fully priced in, there’s still a lot of uncertainty in terms of forward guidance, which is what will ultimately determine how the markets react on Thursday. Given the recent weak indicators from Germany, it looks like growth at the Eurozone’s largest economy has weakened again, which could be an indication for what’s to come in the early parts of this year. As a result, the ECB will not want to be too aggressive in its forward guidance, especially as other central banks have now either slowed the pace of tightening or paused it. That said, given that inflation remains very high here compared to the US, the ECB is going to tighten its policy at least a couple of more times before pausing. This should help provide support for the euro on the dips. How will the markets react to the ECB decision? So, the interest rate decision should be a straight-forward 50 basis point hike. Let’s take a look at various scenarios insofar as the forward guidance is concerned. Investors will want to know whether the ECB is going to fully commit itself to another 50-bps hike in March and at its next meeting. 1) If so, this should send the EUR/USD 100-200 pips higher on the day, above the 1.10 handle, and cause the DAX and other European indices to slump. 2) The second scenario would be if the ECB keeps the door open for 50-bps hike in March but provides a less hawkish forward guidance for its subsequent meetings. This would probably prevent the EUR/USD from moving too much away from 1.10 handle and keep equity market bulls somewhat happy. 3) The third scenario would be if the ECB does not pre-commit to any further 50-bps hikes and instead suggest that the pace of tightening will slow down. In this scenario, the EUR/USD should drop sharply, perhaps by 100-200 pips in initial response to around 1.0700, while the DAX could surge by 2% or more. By Fawad Razaqzada on behalf of FOREX.com
by FOREXcom
ECB Playbook – Still The Most Determined Hiker in G10It has been clear of late that the ECB is one of, if not the most, determined G10 central banks when it comes to raising rates, tightening financial conditions, and attempting to bring inflation back under control. The battle against rampant inflation will continue at the February meeting, with another 50bps hike expected, as well as guidance accompanying the move that another such aggressive move is likely in March. Rate Outlook Both such moves are full priced in by money markets, with the Governing Council having been resolute in guiding towards this relatively aggressive pace of tightening. A slew of speakers have rammed home President Lagarde’s guidance to this extent at the December press conference, while it was remarkable how rapid and decisive the ECB were in pushing back on ‘sources’ reports that a 25bps hike may be considered in March. In contrast to most, almost all, other G10 central banks, the ECB’s desire to continue tightening financial conditions is clear for all to see. This desire stems from two sources – economic output proving significantly more resilient than had been expected at the end of last year, and core inflation remaining elevated, even as headline CPI continues to roll over. Taking both of these factors into account, it seems rather unlikely that more dovish members of the Governing Council are likely to secure any concessions for now, with the prior guidance of the deposit rate rising to 3% at the March meeting likely to be reiterated. It is the rate path beyond March that is likely to attract significantly more market attention, and be the primary driver of any volatility in the EUR and euro assets more broadly. Our expectation is that the ECB deliver one further 25bps hike in May, before hitting the pause button to assess the impact of the full tightening cycle on the bloc’s economy; it’s worth noting that both household and business borrowing costs don’t yet appear to fully reflect the impact of the 250bps of tightening delivered since last summer, let alone any further hikes. Consequently, the ECB could remain at their terminal rate for longer than their G10 peers. The Balance Sheet Of course, rates are not the only area of consideration, with the mammoth €5tln balance sheet also likely to be under the microscope. At the December meeting, the Governing Council noted that further information would be provided at the start of this year as to how the quantitative tightening process will unfold. While we are already aware that approximately €15bln worth of bond holdings will roll off from the portfolio each month during the second quarter, it is not yet clear the exact composition of said maturing bonds, particularly the national split of bonds which will be jettisoned each month/quarter. Given the importance of core-periphery spreads in ensuring accurate and reliable policy transmission across the bloc, this often-overlooked area of policy will likely attract significant attention. Were we to see a more aggressive pace of asset rundown than markets expect, or a portfolio reduction weighted more heavily than expected towards periphery economies, this could threaten stability in the bloc – sending the BTP-Bund spread back above 200bps, and posing another communications challenge for the ECB. Incoming Data Permits Aggression Despite some potential trepidation around embarking on balance sheet reduction, and the exact manner by which this will take place – outright asset sales are of the cards for now – incoming economic data permits the ECB to retain an aggressive stance for now. Incoming reports have consistently beaten expectations since the turn of the year, with economic activity having proved more resilient than consensus expected largely by virtue of the warmer than expected weather avoiding the full-blown energy crisis that some had predicted. Consequently, it now seems highly unlikely that the bloc will experience the winter recession that many had expected, while the latest PMI figures point to the economy actually having expanded once again as 2023 got underway. Meanwhile, on the inflation front, although energy prices have significantly rolled over, and a clear peak has now formed in headline CPI, core inflation continues to rise, having hit a record high 5.2% in December, and being expected to sit at or around this level for much of the first half of the year, with underlying price pressures intensifying across much of the services sector. This should give the Governing Council enough ammunition to retain their present hawkish stance for at least the next quarter or so, even if the next round of economic projections (due in March) are likely to show a chunky downgrade from the 6.3% headline inflation rate previously forecast for year-end. Trading the EUR One can’t consider the ECB meeting in isolation when looking at the EUR this week, with decisions also on deck from the FOMC and BoE which must both be factored into a trading plan. Personally, from a more fundamental view, EUR/GBP looks like a simpler trade – pitting a determined hiker in the ECB, against a reluctant hiker with the potential for dovish surprise in the form of the BoE. The cross currently trades in a relatively tight range between the 50- and 100-day moving averages at 0.8735, and the 0.89 figure. A break to the top of said range seems a reasonable expectation over the course of the week, particularly with 1-week implied volatility pricing a range of +/- 360 pips during the next 5 trading days. Long EUR/USD could also be considered, and would become more attractive if Wednesday brings a dovish Fed surprise, though the bulls are unlikely to become seriously interested unless and until we have a closing break above 1.0930, the top of the recent range. Trading European Indices European indices will also likely experience a sizeable degree of volatility over the ECB decision. The pan-continental Stoxx 50 is presently butting up against the top of its recent range, with a closing break above 4195 opening the door to a return to the 4300 level that proved rather sticky in December 2021, before last year’s bear market began. Other European indices demonstrate similar characteristics from a purely technical point of view – with both the DAX 40 & CAC 40 also butting right up against the top of recent trading ranges. Given the broader US to Europe rotation currently taking place, it would be no surprise to see all three of these major European benchmarks end the week at new 12-month highs.
by Pepperstone
2023: Time to dive deep into value2023 is off to a cautious start, heralded by the International Monetary Fund (IMF). They have warned that the upcoming recession is likely to leave the global economy fundamentally damaged – with a recession in the US, a deeper slowdown in Europe, and drawn-out recession in the United Kingdom. This is quite possible. However, the current downturn may not look like the downturns of the past - supported by a more resilient labour market. As we transition to 2023, three questions from 2022 still remain unanswered: 1) how sticky will the underlying inflation be 2) how intense will the recession be 3) will we find a solution to Europe’s energy crisis. 2022 has been a tough year for equities, evident from the 20% decline in the global stock market capitalisation to USD $96.6 tn1. Expensive growth stocks that had driven markets higher over the past decade began to correct sharply as the interest rate regime changed. In contrast, value stocks, while down for the year, were relative outperformers. The MSCI value index outperformed its growth counterpart by 21% this year1. The rising rate environment had a strong role to play in the higher relative performance. Central banks turn up the hawkish rhetoric While inflation has begun showing signs of easing globally, central banks in the US, Europe, and UK continue to remain hawkish. The Federal Open Market Committee’s (FOMC) new forecasts for the economy and policy showed few signs that the inflation picture is improving meaningfully. Federal Reserve (Fed) Chair Powell made clear in the December meeting that he wanted to see “substantially” more progress on inflation before the hiking would stop. The latest European Central Bank (ECB) projections show inflation is unlikely to reach the 2% target until late 2025. At its December meeting, the ECB took a hawkish turn, and we think they are likely to hike by 50bps at least twice more, in February and March 2023. Similarly in the UK, the Monetary Policy Committee (MPC) will need to see core consumer price index (CPI) inflation slow materially before the MPC stops its rate hike cycle. The key question in 2023 remains how sticky inflation will be on the upside (how soon it will approach the central bank’s targets), as it will determine the likelihood of central banks maintaining their hawkish stance on monetary policy. Historically the value factor has demonstrated resilience during periods of interest rate volatility. De-risking your equity portfolio with the high dividend and value factor As interest rate volatility is poised to remain high, value-oriented stocks such as financials, energy, utilities, healthcare and industrials may be in better shape to withstand a slowdown. This is because value companies tend to make their money in the near term owing to which earnings for these companies are less discounted than for growth companies whose significant profits and cash flow are expected to occur far in the future. Value stocks also have a better chance of defending and/or growing their operating margins compared to growth stocks. The high dividend factor is synonymous with an investment strategy that gains exposure to companies that appear undervalued and have demonstrated stable and increasing dividends. The strong performance of the dividend factor in 2022 has been a function of their close relationship with stocks with more stable fundamentals alongside the rising rate environment. What worked in 2022? Our approach to blending the high dividend factor alongside the value factor helped the WisdomTree US Equity Income UCITS Index outperform the S&P 500 Index by 24.8% in 2022. As illustrated in the sector attribution (above) the allocation has been positive, contributing to the tracking difference by +21%. The overweight in energy, healthcare and utilities benefitted performance by +12%, 2% and 1% respectively last year.
EUREX:FMOV1!
by aneekaguptaWTE
EUR/USD -19/01/2023-• Daily EURO/DOLLAR chart, zooming out back to 2021, where the 1.5 year downtrend started • Short term, trend is bullish, higher highs higher lows • Rising wedge forming, a bearish reversal pattern • Resistance levels becoming support levels, a clear sign of an uptrend • However, looking at the big picture changes the outlook a little bit • Drew Fibonacci retracement levels 50% and 61.8% of the long term downtrend • 50% level is around 1.09 and 61.8% is around 1.1225 • Bulls are now fighting to break the 50% level, without success till now • Last area of defense for the bears is the 61.8% critical correction level • If 1.1225 level stays intact, the pair will resume the long term downtrend • Only if bulls manage to break the above level, we can safely say that the long term trend reversed and we are in a bullish market
0
by RamziAbouAbdallah-CMT
6
Where is the EURUSD headed amid the EU and US inflation lag?We hope everyone had a great start to the year! As we think about the year ahead and some of the major themes that might play out, the EU vs US inflation story is among those catching our eyes now in particular. “Inflation” & “Rate Hikes” were the main talking points for the US Economy in 2022 as the US Federal Reserve (Fed) reacted and adjusted to stubborn inflation. On the other side of the Atlantic, a similar situation is playing out, albeit with a 4 to 7 months lag behind the US. Measuring the difference between the turning points, we can roughly determine the lag between the economic indicators. Headline Inflation (top chart) in the US moved up close to 7 months before the EU’s. Core Inflation (middle chart) in the EU lags the US by 5 months. Policy reaction (bottom chart) of the European Central Bank (ECB) lags the Fed by 4 months. This dynamic is important when trying to understand the path forward for the EURUSD currency pair as central banks watch inflation figures and adjust policy rates accordingly. EU & US policy rate differentials help us sniff out major turning points for the EURUSD pair. As seen in the chart above, the yield differential measured using CME Eurodollar and Euribor futures, started to widen in September 2021, which marked the EURUSD tumble from 1.160 all the way to 0.987. But now it appears the reverse is happening. Yield differentials are starting to close as markets adjust to slower pace of rate hike environment in the US while ECB still battles stubbornly high inflation. Using CME’s Fed watch tool as well as Bloomberg’s OIS Implied Euro interest rate probability tool, we can estimate the market implied forward path for the 2 major central bank’s policy rates. With the market expecting the Fed to pause rate hikes in March, while the ECB is expected to only pause in July. Interestingly, the difference in expected rate pivot is in line with the 4 to 7 months lag in economic conditions we established from the analysis above. As the ECB continues to hike while the Fed pauses, yield differential is likely to close, helping to boost Euro’s attractiveness against the USD. Coupled with the dollar’s downward momentum, This could favor further strength in the EURUSD pair. On the technical front, we see a golden cross with 50-day moving average crossing above the 200-day moving average for the pair. Coupled with an uptrend and spike in the RSI, it has marked the recent up trends remarkably well. If this historical behavior holds, the EURUSD pair could still have further room to run. For those who use Parabolic SAR, the current chart has just flipped back to a buy signal after the recent price consolidation. Given the ECB’s policy lag, dollar weakness, and a bullish technical setup, we lean on the buy side for the EURUSD pair. We set our stop at the 1.0520 level, and take profit level at 1.12800, with each 0.00005 increments per EUR in the EURUSD futures contract equal to 6.25$. Do also check out our previous EURUSD idea which played out nicely: The charts above were generated using CME’s Real-Time data available on TradingView. Inspirante Trading Solutions is subscribed to both TradingView Premium and CME Real-time Market Data which allows us to identify trading set-ups in real-time and express our market opinions. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com Disclaimer: The contents in this Idea are intended for information purpose only and do not constitute investment recommendation or advice. Nor are they used to promote any specific products or services. They serve as an integral part of a case study to demonstrate fundamental concepts in risk management under given market scenarios. A full version of the disclaimer is available in our profile description. Sources: www.cmegroup.com www.cmegroup.com Bloomberg
CME:6E1!Long
by inspirante
EUR/USD Daily Chart Analysis For Week of January 13, 2023Technical Analysis and Outlook: The euro-dollar has bounced strongly from Mean Sup 1.052 as specified EUR/USD Daily Chart Analysis for January 6. The prevailing up path to the newly created Mean Res $1.070 and Key Res $1.078 is completed with the eye towards Outer Currency Rally 1.1100. However, be aware that this puppy is in the process of breaking downwards to newly formed Mean Sup $1.070 to reignite upward action as specified above.
by TradeSelecter
1
EUR/USD Daily Chart Analysis For Week of January 6, 2023Technical Analysis and Outlook: The euro-dollar has bounced strongly from Mean Sup 1.058 as specified EUR/USD Daily Chart Analysis For the Week of December 30. The prevailing up path to the newly created Mean Res $1.070 and Key Res $1.078 is ongoing with the current market sentiment. However, be aware there is the possibility that this puppy may break downwards from Mean Res $1.070 to reignite upward action as specified above.
by TradeSelecter
EUR/USD dips lower, German PMI improvesWelcome to the first trading day of the New Year. Trading remains thin, as most markets are closed.  In the European session, EUR/USD is trading at 1.0679, down 0.23%. I expect a quiet day for the euro. There are no US events on the schedule. German Manufacturing PMI improved to 47.1 in December, up from 46.2 in November and shy of the consensus of 47.4 points. Manufacturing remains below the 50.0 level that separates contraction from expansion, and expectations remain pessimistic. The silver lining to a gloomy situation is that the outlook has improved slightly, as the December release was the strongest in three months. It was a similar pattern in the eurozone, as the Manufacturing PMI rose to 47.8, up from 47.1 in November, also a three-month high. Manufacturing in Germany and the eurozone has suffered a tough year, and demand remains weak. The global outlook remains uncertain and with the ECB promising further rate hikes, the risk-to-demand outlook is tilted to the downside. Still, December showed an improvement, as concerns over an energy crisis have lessened and inflation has eased. We'll get a look at key inflation releases this week. German publishes December CPI on Tuesday, followed by eurozone CPI on Friday. Both indicators are pointing to inflation heading lower, which could have an impact on ECB rate policy. The ECB raised rates by 50-bp in December and meets next on February 2nd. If anyone needed a sober forecast for 2023, there was one today from the International Monetary Fund. The head of the IMF, Kristalina Georgieva, warned that 2023 would be tougher than last year, as the US, EU and China would see growth slow. Georgieva said that she expected one-third of the global economy to be in recession. In October, the IMF cut its growth outlook from 2.9% to 2.7%, due to the war in Ukraine as well as central banks around the world raising interest rates. EUR/USD is testing support at 1.0674. Below, there is support at 1.0566 There is resistance at 1.0782 and 1.0852
by OANDA
Euro shrugs as Spain's inflation dropsIt's the last trading day of 2022, and EUR/USD is almost unchanged in what should be a quiet day in the currency markets. In the European session, EUR/USD is trading at 1.0674, up 0.13%. The week between Christmas and New Year's is usually very light on data, and there were no tier-1 events in Germany or the eurozone this week. Earlier today, Spain released the initial CPI estimate for December, which showed that inflation continues to weaken. CPI dropped to 5.8%, down from 6.8% and below the estimate of 6.0%. Inflation in Spain slowed for a fifth successive month, as energy costs keep coming down. Headline CPI is down sharply from a peak of 10.8% in July, but the news was not all positive, as core inflation rose to 6.9%, up from 6.3%. The Spanish inflation report kicks off a host of eurozone inflation releases next week. Investors will be hoping that the German and eurozone CPI data will mimic the Spanish release and point to inflation heading lower. The ECB will be keeping a close eye on these inflation reports, and the data will be an important factor in the ECB's decision as to the pace of future rate increases. The ECB delivered a 50-bp hike earlier this month, down from the 75-bp increase in October. ECB President Lagarde warned the markets not to view the move as a dovish pivot and said that more rate hikes were on the way. ECB Vice Vice-President Luis de Guindos reiterated Lagarde's hawkishness last week, saying that 50-bp rate hikes "may become the norm in the near future." 1.0660 is a weak support line. Below, there is support at 1.0616 There is resistance at 1.0702 and 1.0778
by OANDA
1
Euro higher as US jobless claims riseWe're seeing limited movement in the currency markets this week, which is not uncommon during the week between Christmas and New Year's. Trading volume remains thin and the data calendar is very light. In the North American session, EUR/USD is trading at 1.0649, up 0.35%. The US released unemployment claims today, one of the highlights in a quiet week. Initial jobless claims climbed as expected to 225,000, up from 216,000. A rise in week-to-week claims should not alarm investors, as there is bound to be some fluctuation in the releases. The 4-week moving average, which smooths out these fluctuations, remained virtually unchanged at 221,000. There are no tier-1 releases out of Germany or the eurozone this week. On Friday, Spain releases CPI for December, and inflation in the eurozone's fourth-largest economy could signal what to expect from next week's German and eurozone inflation releases. Inflation in Spain has been steadily dropping, from a peak of 10.8% in July to 6.8% in November. The downtrend is expected to continue in December, with a consensus of 6.1%. The ECB has sent out hawkish messages lately, with Vice-President Luis de Guindos saying last week that "Increases of 50 basis points may become the new norm in the near term." De Guindos added that the ECB was concerned that the markets might underestimate the persistence of inflation. Fed Chair Jerome Powell would wholeheartedly agree, as the Fed has found it tough going to convince the markets that it remains hawkish and plans to continue raising rates into 2023. The markets jumped on a couple of soft US inflation reports as an indication that the Fed would pivot and become dovish, sending the US dollar sharply lower. It was only after a hawkish Fed meeting earlier this month that the markets seemed to get Powell's message. Still, the Fed remains concerned that such speculation could loosen market conditions and complicate the Fed's painstaking battle to curb inflation. EUR is testing resistance at 1.0660. Above, there is resistance at 1.0746 1.0574 and 1.0488 are providing support
by OANDA
EUR/USD Daily Chart Analysis For Week of December 23, 2022Technical Analysis and Outlook: The euro-dollar stays put under our Mean Res 1.0680. The prevailing down path points to the Mean Sup 1.0470, and extended probabilities to Mean Sup 1.0330 is a high degree of certainty. However, the upside move to retest Mean Res 1.0680 and Key Res $1.0780 is possible within the current market sentiment. Of course, the question is always, 'Which way will this puppy break from the current position?'.
by TradeSelecter