- EUR / USD has risen to 1.1340, but remains stagnant within recent intraday ranges.
- More robust macroeconomic data from the US has been ignored, focusing on Friday’s US employment report.
The EUR/USD continues to trade within recent intraday ranges in the 1.1300-1.1350 zone as currency markets take a breather from the high volatility of recent sessions. Forex market conditions are likely to remain fairly subdued now ahead of Friday’s US employment report. The pair has risen modestly and is currently trading at 1.1340, up 0.2% on the day. These gains come despite strong new macroeconomic data from the US in the form of a better-than-expected number of jobless claims and job layoffs in November fell to nearly 30-year lows.
The pair has also largely ignored recent headlines about Germany by imposing restrictions on the unvaccinated and tightening restrictions in Belgium. Later, four members of the Fed will give statements.
Following strong macroeconomic data from the US and aggressive comments from Powell, who seemed concerned about inflation risks and hinted at a more rapid reduction in QE, the USD money markets have been shedding the dovish price revision. last Friday. Recall, the Omicron variant news last Friday saw markets aggressively slash expectations for Fed policy tightening in 2022 amid fears that it would derail the US economic recovery. December 2022 3-month Eurodollar fell from about 1.10% on Thursday to a low of 0.80% on Tuesday before Powell’s comments, but has since recovered to around 1.0%.
But the dollar struggles to keep up
However, the dollar’s recovery has been much less impressive. EUR / USD is trading near 1.1200 and is trading 30-40 pips below Tuesday’s highs of 1.1385. Uncertainty regarding the new variant remains high and it appears that this, combined with profit taking on the overbought dollar (particularly against the euro) keeps the EUR / USD supported. As for the technical; The EUR / USD is currently testing a key downtrend that acted as support until mid-November, but is now acting as resistance. This, along with the previous weekly highs and the 21-day moving average at 1.1380, is likely to continue to limit price action for now.
Technical levels
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