- The US Michigan Consumer Confidence Index improved to 59.1 in December.
- The uncertainty surrounding the US Federal Reserve’s decision weighs on mood.
- EUR/USD eases following upbeat US data but holds above 1.0500.
Despite a knee-jerk mid-week, the EUR/USD pair is comfortably trading above the 1.0500 threshold, seesawing around 1.0530 following the release of the December University of Michigan's (UoM) Consumer Confidence Index, which rose by more than anticipated, to 59.1 from 56.8 in November. Market players had anticipated a setback to 53.3
Upbeat US data helped the US Dollar by the end of the week amid a deteriorating market sentiment. US indexes turned lower with the release, as speculative interest anticipates a potentially aggressive US Federal Reserve. The central bank has anticipated it would slow the pace of quantitative tightening, and Chair Jerome Powell hinted it could happen as soon as this month.
However, resilient macroeconomic data leaves the door open for yet another 75 bps hike, ahead of a smaller one. Recession concerns add to the dismal mood, as the higher rate goes, the higher are the chances of an economic setback.
EUR/USD technical perspective
According to Valeria Bednarik, FXStreet.com chief analyst, “The EUR/USD pair weekly chart shows that the pair posted a higher high and a higher low, maintaining the risk skewed to the upside. The same chart shows that the 20 Simple Moving Average (SMA) advances far below the current level, at around 1.0080, while technical indicators consolidate near overbought readings, all of which favors a bullish continuation. Finally, the 100 SMA is crossing below the 200 SMA, both far above the current level, losing relevance as a bearish signal.”
She also added that “ EUR/USD needs to break above 1.0580 to be able to extend its gains towards 1.0620 first, and 1.0700 later. A break above the latter should bring the 1.1000 figure to the table. Buyers stand at around 1.0490, while the next support level is 1.0420. An unlikely slide below the latter could favor a downward extension towards 1.0300.”
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
Japanese Yen rises following Tokyo CPI inflation
The Japanese Yen (JPY) gains ground against the US Dollar (USD) on Friday. The USD/JPY pair pulls back from its recent gains as the Japanese Yen (JPY) strengthens following the release of Tokyo Consumer Price Index (CPI) inflation data.
AUD/USD weakens to near 0.6200 amid thin trading
The AUD/USD pair remains on the defensive around 0.6215 during the early Asian session on Friday. The incoming Donald Trump administration is expected to boost growth and lift inflation, supporting the US Dollar (USD). The markets are likely to be quiet ahead of next week’s New Year holiday.
Gold price remains subdued despite increased geopolitical tensions
Gold edges lower amid thin trading following the Christmas holiday, trading near $2,630 during the Asian session on Friday. However, the safe-haven asset could find upward support as markets anticipate signals regarding the US economy under the incoming Trump administration and the Fed’s interest rate outlook for 2025.
Floki DAO floats liquidity provisioning for a Floki ETP in Europe
Floki DAO — the organization that manages the memecoin Floki — has proposed allocating a portion of its treasury to an asset manager in a bid to launch an exchange-traded product (ETP) in Europe, allowing institutional investors to gain exposure to the memecoin.
2025 outlook: What is next for developed economies and currencies?
As the door closes in 2024, and while the year feels like it has passed in the blink of an eye, a lot has happened. If I had to summarise it all in four words, it would be: ‘a year of surprises’.
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.