- The Euro bounces higher from 1.0625 and approaches the 1.0650 area.
- The dollar retreats in a sluggish trade after Christmas.
- EUR/USD should return above 1.0780 to confirm the long-term uptrend — SocGen
The USD recovers ground during the European session on Wednesday. The pair has bounced from the intraday low of 1.0625 to regain lost ground and approach the 1.0650 zone.
However, from a broader perspective, the common currency remains trapped within a horizontal channel between 1.0610 and 1.0650, consolidating gains after an 11% recovery from September lows at 0.9535.
The USD pulls back in a low volume trading session
In the absence of key macroeconomic factors, the dollar remains lower this week on mounting speculation that the Federal Reserve will slow down the tightening cycle in 2023.
US data released last Friday showed inflationary pressure easing for the third consecutive month in November, suggesting that the peak of inflation may have passed. These numbers would give the Federal Reserve some leeway to ease its hawkish stance in the coming months, adding to the selling pressure on the dollar.
In addition, moderately positive market sentiment, buoyed by news that China is easing restrictions on incoming travelers and easing greedy control policy, is putting additional pressure on the safe haven dollar. sure.
The dollar index, which opened the day slightly positive, has turned lower from the session highs of 104.35 during the European session, losing around 0.25% to approach the 104.00 level.
EUR/USD needs to return above 1.0780 to resume its uptrend — SocGen
Analysts at Société Générale point to 1.0780 as a crucial level to confirm the long-term uptrend: “The recent bounce has played out within two converging uptrend lines that form a rising wedge; this generally denotes a reversal of bullish momentum. This is also evident in the daily MACD, which has turned flat (…) Should the bounce falter near 1.0780, a short-term pullback towards the 200 DMA at 1.0340 and 1.0220 is not ruled out. “.
technical levels
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.
