The price of the EUR/USD closed last week’s trading higher, breaking through the psychological resistance level of 1.1000, which supports the bulls’ control. Today is a holiday for the markets in celebration of Christmas, so there may be little movement for the currency pair. Obviously, this may be the case throughout the week during the holiday season.
Forex Brokers We Recommend in Your Region
On the economic side, a report on Friday showed that the US inflation measure preferred by the Federal Reserve slowed more than economists expected, falling to 2.6% in November from 2.9% in the previous month. Recently, this repeated other inflation reports for November that were released earlier in the month. As a result, some analysts commented that “US inflation has come down very quickly this year, especially in the past three to five months. Also, ”Over the next few months, we believe that inflation will dissipate in terms of the items that are top of mind” as risks to financial markets.
Friday’s data also showed that US consumer spending rose unexpectedly during the month. Furthermore, while this is a good sign of growth for an economy that relies primarily on consumer spending, it may also indicate continued underlying pressure on inflation. in general. Moreover, the US Federal Reserve is walking a tightrope, trying to slow the economy enough through high interest rates to calm inflation, but not so much that it might lead to a recession. A stronger-than-expected economy could complicate the balancing act.
On the other hand, the year ends somewhat calmly, with a weak performance for the euro against the majority of the G10 currencies. Moreover, as investors increase their expectations regarding the European Central Bank (ECB)’s bets in the face of low inflation in the euro area and a long period of weak economic performance. Incontrovertibly, 2024 will be about the timing and size of interest rate cuts in the world’s central banks, and the currencies that make the early and bold cuts will likely fare the worst. So, your outlook for the euro in 2024 depends on where you place the ECB on this spectrum.
There is no change in our technical perspective until there is a change in performance, and this might happen when investors and markets return from the holiday season. Currently, based on the performance on the daily chart below, there is an upward shift in the performance of the EUR/USD currency pair as long as it remains stable around and above the psychological resistance level of 1.1000. therefore, if the weakness in the dollar persists, the currency pair may find an opportunity for further rebound. Technically, the nearest resistance levels are 1.1065 and 1.1120, respectively. From the latter level, technical indicators will begin to move towards overbought levels. On the other hand, during the same time frame, the return to the support level of 1.0880 will be crucial for the bears to regain control and dissipate the current upward momentum.
Ready to trade our daily Forex analysis? We’ve made this forex brokers list for you to check out.
