- The EUR/USD is drifting higher in Friday trading, clipping into 1.0900.
- Markets are tilting risk-on as investors re-up on bets that the Fed is done with rate hikes.
- Investors to dig into the Fed's Meeting Minutes due next Tuesday.
The EUR/USD clipped into the 1.0900 handle late Friday to round out a trading week that saw an early rally into the 1.0880 region after catching a lift from the week's opening bids near 1.0680.
Forex Today: Worst week since July for the Dollar
US inflation figures softened noticeably this week, driving market sentiment back into the top end and sending the US Dollar (USD) lower across the board as risk-on bets piled into the Euro (EUR). The EUR/USD has been pinned into the top side as traders take a break from ongoing Federal Reserve (Fed) great hike concerns.
Markets rally as investors herald the end of Fed rate hikes
As growth and inflation figures ease in the US, money markets are pricing in a 100% chance of a rate hold from the Fed in December. With the Fed switching from an aggressive "higher for longer" stance to a more dovish "wait and see" approach to their regular rhetoric, investors are eating up any opportunity for risk appetite as US data continues to show inflation easing.
European finalized Harmonized Index of Consumer Prices (HICP) printed as expected early Friday, with October's month-on-month showing a 0.1% increase and the annualized number coming in at 2.9%.
European inflation is slowly easing back towards the 2% target band set by the European Central Bank (ECB), and forward-looking upside potential for the Euro may be capped now that the ECB looks well and done on rate hikes.
US housing data is helping to bolster risk sentiment for Friday
US Building Permits in October increased from 1.471 million (revised down from 1.475 million) to 1.487 million, beating the forecast decline to 1.45 million. October Housing Starts also beat the street, adding 1.372 million residential units compared to September's 1.346 million (also revised down from 1.458 million), beating the 1.35 million expected.
EUR/USD Technical Outlook
The EUR/USD's Friday risk-on rally sees the pair testing chart territory at the 1.0900 handle, pushing into fresh highs for the week ahead of the closing bell.
The Euro is up 2.2% against the US Dollar from the week's lows near 1.0665.
The EUR/USD caught a bounce from the 200-hour Simple Moving Average (SMA) last week, and the pair is testing into its highest bids since late August.
This week's rally above the 1.0800 handle sees the EUR/USD cracking the 200-day SMA and leaning into the bullish side for Friday, with the 50-day SMA rotating into a bullish stance just north of 1.0600 as the moving average struggles to keep up with the Euro's top side push.
EUR/USD Hourly Chart
EUR/USD Daily Chart
EUR/USD Technical Levels
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.