- EUR/USD retraces some of the recent advance.
- Dollar price action does not look conclusive near the 102.00 level.
- GDP growth in Germany surprised to the upside.
Investors seem to give up some of the recent strong advance of the EUR/USD and force the pair to move back to the 1.0830 area during the European session on Friday.
EUR/USD: The rise seems limited around 1.0870
Following an earlier move towards fresh highs near 1.0870, EUR/USD comes under modest selling pressure and gives up some of those gains, against the backdrop of faltering dollar price action and alternating risk appetite trends on Friday.
In fact, dollar remains under pressure after softer US inflation numbers for the month of December (released on Thursday), while some profit-taking mood seems to be affecting the euro.
On the eurozone calendar, the France final headline CPI contracted 0.1%m/m in December and increased 5.9% in the last twelve months. In Germany, year-on-year GDP growth increased by 1.9% in Novemberwhile industrial production in Italy contracted 0.3% mom also in November and 3.7% year-on-year.
Secondly, November industrial production in the euro area increased by 2%above the expected 0.5%.
On the other side of the Atlantic, Michigan’s preliminary consumer sentiment readings for January will be the highlight during the American session.
What can we expect around the EUR?
EUR/USD Extends Strong Rebound on Friday to levels last seen in late April 2022 around 1.0870.
The price action around the European currency should closely follow the dynamics of the dollar, as well as the impact of the energy crisis in the euro area and the divergence of monetary policies between the Fed and the ECB.
Returning to the Eurozone, growing speculation about a possible recession in the bloc emerges as a major domestic headwind facing the Euro on the short-term horizon.
EUR/USD technical levels
At time of writing, EUR/USD is down 0.15% on the day, trading at 1.0835. A break of 1.0481 (Jan 6 low) would target 1.0443 (Dec 7 low) en route to 1.0442 (55-day SMA). To the upside, the next barrier is 1.0867 (13 Jan high), followed by 1.0900 (round level) and 1.0936 (21 Apr 2022 high).
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.
