EUR/USD Current Price: 1.0618
- The German Producer Price Index rose less than anticipated in November, supporting the EUR.
- The US Dollar remains on the back foot after the Bank of Japan's monetary policy decision.
- EUR/USD is technically neutral in the near term, although bulls are in charge on the broader view.
The EUR/USD pair surged on Tuesday and traded as high as 1.0651 as the US Dollar got sold off during Asian trading hours following the Bank of Japan (BoJ) monetary policy decision. The Japanese central bank left its benchmark rate unchanged at -0.1% and maintained the 10-year Japanese Government Bond (JGB) yield at 0.00%, as expected. Policymakers, however, introduced a minor twist: they will allow the 10-year JGB yield to fluctuate between -0.5% and 0.5%, compared to -0.25% and 0.25% previously, and noted that they would review the yield curve control operation.
BoJ Governor Haruhiko Kuroda reaffirmed the central bank's dovish stance, repeating they are ready to ease further and noting it is no time to debate exiting quantitative tightening. Nonetheless, the Japanese Yen (JPY) soared, pushing the US Dollar down across the FX board.
Meanwhile, the EUR partially benefited from encouraging local data. The Euro Area seasonally-adjusted Current Account posted a surplus of €-0.4 billion, beating expectations. More relevantly, the German November Producer Price Index rose at an annual pace of 28.2%, easing from the previous 34.5% and missing expectations of 30%. The United States will later release November Housing Starts and Building Permits.
Stocks trade dip in the red, with European indexes posting modest losses and US ones poised to open below Monday’s close. On the other hand, US Treasury yields advanced, although the yield on the 10-year note keeps adancing at a faster pace than that of the 2-year note, preventing the US Dollar from appreciating.
EUR/USD short-term technical outlook
The EUR/USD pair remains within Monday's range, trading a few pips below the mentioned intraday high. In the daily chart, the pair continues to develop above a firmly bullish 20 Simple Moving Average (SMA), which advances above the longer ones and provides dynamic support at around 1.0510. Technical indicators hold well above their midlines but lack evident directional strength. The Momentum turned marginally lower, while the Relative Strength Index (RSI) ticks higher at around 64. Nevertheless, bulls are unwilling to give up, and maintain the upward pressure.
EUR/USD is neutral, according to technical readings in the 4-hour chart. The pair is currently hovering around a mildly bearish 20 SMA, while the longer moving averages maintain their bullish slopes far below the current level. Technical indicators, in the meantime, retreat from around their midlines but remain within neutral readings and without directional strength. The pair needs to clear the 1.0650 price zone to be able to extend gains, although there is no catalyst in sight at the time being.
Support levels: 1.0580 1.0535 1.0480
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
AUD/USD consolidates strong Aussie Retail Sales-led gains above 0.6900
AUD/USD holds gains above 0.6900 in Asian trading on Tuesday. Stronger-than-expected Australian Retail Sales data continue to underpin the pair amid a broad US Dollar resurgence, as risk sentiment sours. US data and Fedspeak eyed.
USD/JPY regains 144.00 on renewed US Dollar demand
USD/JPY is back above 144.00 in the Asian session on Tuesday, reversing a brief led by the mixed Japanese data and BoJ's hawkish rhetoric on further interest rate hikes. The pair tracks the renewed US Dollar uptick, as traders turn cautious ahead of key US data, Fedspeak.
Gold price trades with mild positive bias above $2,625-2,624 pivotal support
Gold price ticks higher on Tuesday and stalls its recent corrective slide from the all-time top. Bets for further rate cuts by the Fed and geopolitical risks continue to benefit the XAU/USD. Traders now look forward to the release of key US macro data for some meaningful impetus.
Bitcoin and crypto market maintain decline despite Fed Chair Powell's hints at further rate cuts
The general crypto market continued on a downtrend on Monday despite Fed Chair Jerome Powell hinting at the possibility of further interest rate cuts later in the year.
RBA widely expected to keep key interest rate unchanged amid persisting price pressures
The Reserve Bank of Australia is likely to continue bucking the trend adopted by major central banks of the dovish policy pivot, opting to maintain the policy for the seventh consecutive meeting on Tuesday.
Five best Forex brokers in 2024
VERIFIED Choosing the best Forex broker in 2024 requires careful consideration of certain essential factors. With the wide array of options available, it is crucial to find a broker that aligns with your trading style, experience level, and financial goals.