- EUR/USD is still range bound and fails to break above 1.0700 before the end of the year.
- Chicago PMI for December beat expectations and the previous month’s reading.
- EUR/USD Price Analysis: Bullish bias, but failure to reach 1.0700 would expose the pair to selling pressure.
The EUR/USD It advances modestly in the last trading day of 2022, during the North American session, rising 0.13% from its opening price. A light economic calendar keeps EUR/USD within known ranges heading into the week, month, quarter and year-end. At the time of writing, the EUR/USD pair is trading at 1.0695.
Wall Street will open lower as US stock futures fall without a fundamental catalyst. Publication of the Chicago Purchasing Managers’ Index for December, which stood at 44.9, beating the estimate of 40. Non-VAT unemployment benefit claims will be published on Thursday. Thursday’s release of jobless claims put downward pressure on the US dollar (USD), weakening against most G7 currencies.
The dollar index (DXY), which measures the value of the dollar against a basket of currencies, lost 0.33%, trading at 103.634. Despite the fall in the dollar, the yield on the 10-year US Treasury bond rises five basis points to 3,869%.
On the other hand, the European economic agenda revealed that inflation in Spain fell for the fifth consecutive month, to 5.6% year-on-year, below the 6.7% in November. However, due to tight liquidity trading conditions and 2023 just around the corner, it failed to trigger any bullish reaction that could break out of the EUR/USD 1.0600-90 trading range.
In recent hours, the ECB’s Stournaras said rates should tighten enough to lift the pair towards 1.0700 before erasing those gains.
Meanwhile, in geopolitics, Russia and China continue to strengthen their ties, since the videoconference between Russian President Vladimir Putin and Chinese President Xi Jinping showed the intentions of greater cooperation between the two countries in terms of trade, energy, finance and agriculture.
In addition, the Russian invasion of Ukraine continued through New Year’s Eve, as the fourth wave of drones attacked civilian buildings, Ukrainian authorities reported. Shelling continued in Kiyv and Kharkiv, killing at least two people.
EUR/USD Price Analysis: Technical Perspective
From a technical perspective, EUR/USD remains biased to the upside. However, the inability to decisively break above the 1.0700 signal would expose the pair to selling pressure. Oscillators such as the Relative Strength Index (RSI) and Rate of Exchange (RoC) support EUR/USD higher, but low volumes are keeping traders in check.
However, key EUR/USD resistance levels lie at 1.0700, followed by the December 15 daily high at 1.0736 and 1.0800. On the other hand, if the EUR/USD falls below 1.0638, a test of 1.0600 is expected, followed by the 20-day EMA at 1.0575.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
