EUR/USD Current Price: 1.0601
- The EUR benefited from S&P Global reports suggesting inflation in the Euro Zone is receding.
- A sharp decline in government bond yields weighed on the US Dollar.
- EUR/USD trimmed half of its Tuesday gains, but additional advances are still unclear.
The EUR/USD pair recovered half of the ground lost on Tuesday, with the US Dollar falling as it advanced previously, without a clear catalyst. The EUR stands among the weakest USD rivals, as most have trimmed their previous losses. EUR/USD trades a handful of pips above the 1.0600 threshold after hitting an intraday high of 1.0635.
A sharp decline in government bond yields during Asian trading hours put pressure on the Greenback. The Australian Dollar soared amid news China may partially lift the coal imports ban from the country, while the Japanese Yen appreciated on news the Bank of Japan (BoJ) attempted to lower government bond yields, while Governor Haruhiko Kuroda said they would continue to ease monetary policy to achieve their inflation goal. The news affected US Treasury yields, which also declined. Ahead of the US opening, the 10-year note offers 3.69%, down 10 bps on the day.
On the data front, S&P Global published the final estimates of its December PMIs. The German Services PMI was upwardly reported to 49, while that for the Euro Zone was confirmed at 49.8, suggesting the EU has left the worst behind. The reports indicated that price pressures remained elevated but retreated further from their recent peaks. The encouraging news provided mild support to the EUR.
The United States macroeconomic calendar will bring the December ISM Manufacturing PMI, expected to have contracted further, from 49 to 48.5. In addition, during the American afternoon, the United States Federal Open Market Committee (FOMC) will unveil the Minutes of its latest monetary policy meeting. In their December meeting, US policymakers upwardly revised their inflation forecast and hinted at more rate hikes coming up, against the market’s expectations of a potential end of the tightening cycle.
EUR/USD short-term technical outlook
The daily chart for the EUR/USD pair shows that it is stuck around its 20 Simple Moving Average (SMA) while holding above directionless longer ones. At the same time, the Momentum indicator remains flat below its 100 level, while the Relative Strength Index (RSI) gains upward traction within neutral levels. Overall, the risk skews to the upside as long as the pair holds above the 23.6% Fibonacci retracement of the September/December rally at 1.0450.
In the near term, and according to the 4-hour chart, however, the pair has room to extend its slide. EUR/USD topped around a bearish 20 SMA, retreating from the indicator and trading also below the 100 SMA. Technical indicators, in the meantime, turned modestly lower within negative levels after correcting oversold conditions.
Support levels: 1.0560 1.0510 1.0450
Resistance levels: 1.0650 1.0695 1.0740
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
Editors’ Picks
EUR/USD extends recovery beyond 1.0400 amid Wall Street's turnaround
EUR/USD extends its recovery beyond 1.0400, helped by the better performance of Wall Street and softer-than-anticipated United States PCE inflation. Profit-taking ahead of the winter holidays also takes its toll.
GBP/USD nears 1.2600 on renewed USD weakness
GBP/USD extends its rebound from multi-month lows and approaches 1.2600. The US Dollar stays on the back foot after softer-than-expected PCE inflation data, helping the pair edge higher. Nevertheless, GBP/USD remains on track to end the week in negative territory.
Gold rises above $2,620 as US yields edge lower
Gold extends its daily rebound and trades above $2,620 on Friday. The benchmark 10-year US Treasury bond yield declines toward 4.5% following the PCE inflation data for November, helping XAU/USD stretch higher in the American session.
Bitcoin crashes to $96,000, altcoins bleed: Top trades for sidelined buyers
Bitcoin (BTC) slipped under the $100,000 milestone and touched the $96,000 level briefly on Friday, a sharp decline that has also hit hard prices of other altcoins and particularly meme coins.
Bank of England stays on hold, but a dovish front is building
Bank of England rates were maintained at 4.75% today, in line with expectations. However, the 6-3 vote split sent a moderately dovish signal to markets, prompting some dovish repricing and a weaker pound. We remain more dovish than market pricing for 2025.
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.