EUR/USD Vulnerable Amid Push Below January Opening Range
EUR/USD may continue to track the negative slope in the 50-Day SMA (1.0495) as it pushes below the opening range for January.
Share this:
US Dollar Outlook: EUR/USD
EUR/USD extends the rebound from the monthly low (1.0178) to keep the Relative Strength Index (RSI) above 30, but the exchange rate may continue to track the negative slope in the 50-Day SMA (1.0495) as it pushes below the opening range for January.
EUR/USD Vulnerable Amid Push Below January Opening Range
EUR/USD attempts to retrace the decline following the 256K rise in US Non-Farm Payrolls (NFP) as it snaps the recent series of lower highs and lows, and the RSI may show the bearish momentum abating should it move away from oversold territory.
Join David Song for the Weekly Fundamental Market Outlook webinar.
David provides a market overview and takes questions in real-time. Register Here
However, the rebound in EUR/USD may turn out to be temporary as positive data prints coming out of the US raises the Federal Reserve’s scope to pause its rate-cutting cycle, and the update to the Consumer Price Index (CPI) may sway the exchange rate as the report is anticipated to show sticky inflation.
US Economic Calendar
The headline CPI is expected to increase to 2.9% in December from 2.7% per annum the month prior, while the core rate of inflation is seen holding steady at 3.3% during the same period.
Signs of persistent price growth may generate a bullish reaction in the US Dollar as it puts pressure on the Fed to further combat inflation, but a softer-than-expected CPI print may fuel the recent rebound in EUR/USD as it boosts speculation for lower US interest rates.
With that said, EUR/USD may further retrace the decline from the monthly high (1.0437) as it no longer reflects a bearish price series, but the exchange rate may may continue to track the negative slope in the 50-Day SMA (1.0495) as it still holds below the moving average.
EUR/USD Chart – Daily
Chart Prepared by David Song, Senior Strategist; EUR/USD on TradingView
- EUR/USD snaps the series of lower highs and lows carried over from last week amid the failed attempt to close below 1.0200 (23.6% Fibonacci retracement), with a move back above 1.0370 (38.2% Fibonacci extension) bringing the monthly high (1.0437) on the radar.
- Need a break/close above the 1.0448 (2023 low) to 1.0480 (100% Fibonacci extension) zone for EUR/USD to threaten the negative slope in the 50-Day SMA (1.0495), but the exchange rate may continue to hold below the moving average should it fail to test the monthly high (1.0437).
- A close below 1.0200 (23.6% Fibonacci retracement) may push EUR/USD towards parity, with the next area of interest coming in around 0.9950 (50% Fibonacci extension).
Additional Market Outlooks
Australian Dollar Forecast: AUD/USD Halts Four-Day Selloff
USD/JPY Pulls Back to Keep RSI Below Overbought Zone
US Dollar Forecast: USD/CHF Climbs Towards 2024 High
GBP/USD Approaches November 2023 Low
--- Written by David Song, Senior Strategist
Follow on Twitter at @DavidJSong
Related tags:
The complete CFD trading experience
Award-winning platforms, competitive spreads, low commissions and dedicated support.
We live and breathe the markets and are dedicated to helping traders realise their ambitions as we continue to set the industry bar.
Economic calendar
Web Trader platform
Our sophisticated web-based platform is packed with features.
Related articles
Euro Forecast: EUR/USD Tumbles Towards Yearly Low as Daily RSI Goes Oversold
EUR/USD has been hit hard in the final month of the quarter as USD strength has shown up in a big way. With the pair set to challenge its yearly low as RSI has pushed into oversold territory, is there a chance for a pullback with some big headline risk hitting in the US over the next few days?
AUD/USD outlook: Aussie slips despite hawkish RBA ahead of key data
The AUD/USD was unable to benefit from the Reserve Bank of Australia’s 25-basis-point rate hike overnight. The RBA lifted the cash rate to 4.60%, in line with expectations. However, the Australian dollar weakened following the decision, with much of the Bank’s hawkish stance seemingly priced in ahead of the announcement. The US dollar has also remained largely supported following the recent turmoil in the bond markets.
RBA delivers 25bp hike, Bullock now the main event
The RBA delivered the expected 25bp hike, but Bullock’s press conference now looms as the bigger volatility risk for AUD/USD and the ASX 200.
StoneX Europe Ltd may make third party material available on this website which may contain information included but not limited to the conditions of financial markets. The material is for information purposes only and does not contain, and should not be construed as containing, investment advice and/or investment recommendation and/or an investment research and/or an offer of or solicitation for any transactions in financial instruments; any decision to enter into a specific transaction shall be made by the client following an assessment by him/her of their situation.
StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.