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Trends & Analysis
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Trends & Analysis
News

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News

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News

USD/JPY edges lower on economic data

News

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Can anything stop NVIDIA?

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Gold rises on soft dollar, geopolitical concerns

Asset Watch

EUR/USD price breaks above the 1.1000 handle, what’s next?

 

Wednesday, November 29, 2023

EUR/USD price news, and analysis

• The euro benefits from a weaker US dollar
• The EUR/USD faces key technical levels

 

The selling pressure on the US dollar persisted as investors became increasingly convinced that interest rates had peaked, especially following hawkish comments from some Federal Reserve members welcoming signs of an economic slowdown. This alignment with a decline in US inflation levels reinforced the expectation that the central bank’s next move in 2024 would involve interest rate cuts. Market predictions suggest this reduction might commence in the first half of next year, possibly during the May or June meeting, with some investors even anticipating that the first-rate cut could be in the first quarter of 2024.

Consequently, the market has priced in a full 25-basis points rate cut in June and an approximate 100-point reduction by the end of next year. This has led to a decline in US bond yields (medium and long-term) and, in turn, an increase in risk appetite, favoring the soft-landing scenario ie, avoiding an economic recession, thereby keeping US stock indices upbeat.

Traders are eagerly awaiting the release of US personal consumption data tomorrow, which is the Federal Reserve’s preferred method for measuring inflation levels. Expectations are for a decline in core spending levels (excluding energy and food items) YoY from 3.7% in October to 3.5% in November. Any lower-than-expected figures may likely sustain selling pressures on the US dollar. Additionally, the markets will be tuned in to Federal Reserve Chairman Jerome Powell’s speech next Friday to gain more insights into the shape of US monetary policy in the coming year.

 

EUR/USD Price Daily Chart

 

Chart source ADSS Platform

Today, the EUR/USD rallied to a multi-month high at 1.1017 and subsequently retreated as some traders opted to take profits. Currently, the pair moves within the trading zone positioned between 1.0981 – 1.1060. Thus, a daily close below the low end of the zone highlights a weaker upward trend’s momentum, and could prompt more traders to exit their positions, potentially driving prices down to 1.0873. Nonetheless, the support level located at 1.0926 should be considered.

Conversely, a daily close above the high end of the trading range indicates robust upward trend momentum, potentially extending the rise toward 1.1176. Yet, in this scenario the resistance level situated at 1.1110 should be kept in focus.

 


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