The EUR/USD pair declined to 1.0504 on Thursday, influenced by investor reactions to the latest US inflation data. The November US Consumer Price Index (CPI) showed a rise of 0.3% month-over-month, aligning with forecasts but indicating a slight acceleration from the previous 0.2% increase. This recent uptick has adjusted market expectations significantly, reducing hopes for a substantial interest rate cut by the Federal Reserve in the upcoming meeting. According to CME Watch, the likelihood of a 25-basis-point cut is now pegged at 94%.
US inflation stands at 2.7% year-on-year, slightly up from 2.6%, suggesting persistent inflationary pressures despite elevated interest rates. This scenario indicates that consumers remain active, which could complicate the Federal Reserve’s monetary policy strategy.
Meanwhile, the political situation in France has been factored into the EUR/USD rates, though some underlying tensions persist.
Attention now turns to the European Central Bank (ECB), whose interest rate is 3.4%. Market participants are keenly awaiting whether the ECB will adjust rates in its upcoming meeting.
Technical analysis of EUR/USD
H4 chart: the EUR/USD has recently completed a decline to the level of 1.0479 and appears poised to continue this downward trend towards 1.0470. Following this, a corrective move to 1.0535 is anticipated, and once this is complete, another decline to 1.0444 could follow. This bearish outlook is supported by the MACD indicator, with its signal line positioned below zero and trending downwards, indicating continued selling pressure.
H1 chart: the pair is developing a downward structure towards 1.0470, currently consolidating around 1.0505. A breakout below this level could lead to reaching the target level of 1.0470. Subsequently, a rebound to 1.0535 might occur, followed by a further decline to 1.0444. This scenario is supported by the Stochastic Oscillator, with its signal line above 80 but poised to drop towards 20, suggesting a potential shift from overbought conditions to lower levels.
Before you enter foreign exchange and stock markets, you have to remember that trading currencies and other investment products is trading in nature and always involves a considerable risk. As a result of various financial fluctuations, you may not only significantly increase your capital, but also lose it completely. Therefore, our clients have to assure RoboForex that they understand all the possible consequences of such risks, they know all the specifics, rules and regulations governing the use of investment products, including corporate events, resulting in the change of underlying assets. Client understands that there are special risks and features that affect prices, exchange rates and investment products.
Recommended Content
Editors’ Picks
EUR/USD trims losses with Wall Street's opening, advances beyond 1.0500
EUR/USD regained its poise with Wall Street's opening, recovering from a fresh weekly low of 1.0468. The European Central Bank trimmed interest rates as expected, and the United States published discouraging employment and inflation-related data. Markets remain cautious, limiting directional strength.
GBP/USD finds near-term buyers around 1.2700
GBP/USD bounced from around the 1.2700 level in the American session, still trading in the red around 1.2730. A certain dose of caution helps the US Dollar, limiting its bearish potential against most major rivals.
Gold pierces $2,700 as investors assess US news, ECB decision
XAU/USD pierced the $2,700 threshold and remains under pressure as investors diggest US figures and the European Central Bank monetary policy announcement. Inflation in the US at wholesale levels rose by more than anticipated in November, according to the latest Producer Price Index release.
-637336005550289133_Medium.jpg)
Chainlink surges amid World Liberty purchase, Emirates NBD partnership and CCIP launch on Ronin network
Chainlink price surges around 15% on Thursday, reaching levels not seen since mid-November 2021. The rally was fueled by the Donald Trump-backed World Liberty Financial purchase of 41,335 LINK tokens worth $1 million on Thursday.
Can markets keep conquering record highs?
Equity markets are charging to new record highs, with the S&P 500 up 28% year-to-date and the NASDAQ Composite crossing the key 20,000 mark, up 34% this year. The rally is underpinned by a potent mix of drivers.
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.