EUR/USD Current Price: 1.0610

  • European core inflation was higher than initially anticipated in January.
  • FOMC Minutes underpin US Dollar demand amid hints of more monetary tightening.
  • EUR/USD bounced modestly from a fresh February low, risk skewed to the downside.

The EUR/USD pair fell through the 1.0600 threshold and posted a fresh February low of 1.0585, as the Greenback continues strengthening on the back of hawkish US Federal Reserve (Fed) prospects. The United States central bank released the Federal Open Market Committee (FOMC) Meeting Minutes on Wednesday, which were more hawkish than anticipated.

The central bank hiked its benchmark rate by 25 basis points (bps) on February 1 before the release of higher-than-anticipated inflation figures. The Minutes, however, showed that a few members would have preferred a 50 bps hike and that participants believe the continued tight job market would contribute upward pressure to inflation. Finally, policymakers noted that, while inflation is easing, they would need further signs to step back. The news boosted demand for the US Dollar as stock markets turned south.

Early on Thursday, the Euro Zone published the final estimate of the January Harmonized Index of Consumer Prices (HICP), confirmed at 8.6% YoY. However, the core reading was upwardly revised to 5.3% from a preliminary estimate of 5.2%. The American session will bring the second estimate of the US Q4 Gross Domestic Product (GDP) and Initial Jobless Claims for the week ended February 17.

EUR/USD short-term technical outlook

From a technical point of view, the daily chart for the EUR/USD pair shows it has room to extend its slump. The 20 Simple Moving Average (SMA) gains downward traction above the current level, now converging with a Fibonacci resistance at 1.0745, the 61.8% retracement of the 2022 slump. The 50% retracement of such a decline stands at 1.0515, a potential bearish target should the slide continues. At the same time, technical indicators remain within negative levels, although losing their bearish strength.

In the near term, and according to the 4-hour chart, the ongoing recovery falls short of supporting a continued advance. The pair continues developing below all its moving averages, with the 20 SMA accelerating south below the longer ones. Technical indicators, in the meantime, have recovered from their intraday lows but lack momentum and hold within negative levels.

Support levels: 1.0560 1.0515 1.0470

Resistance levels: 1.0630 1.0695 1.0745

View Live Chart for the EUR/USD    

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.

Recommended Content


Recommended Content

Editors’ Picks

EUR/USD treads water just above 1.0400 post-US data

EUR/USD treads water just above 1.0400 post-US data

Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.

EUR/USD News
GBP/USD remains depressed near 1.2520 on stronger Dollar

GBP/USD remains depressed near 1.2520 on stronger Dollar

Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.

GBP/USD News
Gold keeps the bid bias unchanged near $2,700

Gold keeps the bid bias unchanged near $2,700

Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.

Gold News
Geopolitics back on the radar

Geopolitics back on the radar

Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.

Read more
Eurozone PMI sounds the alarm about growth once more

Eurozone PMI sounds the alarm about growth once more

The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.

Read more
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

Majors

Cryptocurrencies

Signatures