- EUR / USD continues to face downward pressure, the dollar firm.
- Higher-than-expected US inflation data continues to have an impact.
- Low volume expected due to US holiday.
EUR / USD had the lowest daily close since July 2020 on Wednesday, as the dollar strengthened following retail inflation data. On Thursday the pair extended the slide and bottomed at 1.1453, before bouncing to 1.1475. The bearish bias remains firm, as is the dollar in the market.
Prices go up, the dollar goes up
The US Consumer Price Index reached its highest level in three decades in October. This triggered expectations of a possible stronger and faster adjustment on the part of the Federal Reserve. Hence, the dollar appreciated on all fronts. Treasury bond yields rose. On Thursday the bond market will not operate due to the US holiday. Wall Street will open normally.
The dollar index rises 0.15% on Thursday and is above 95.00, also at the highest since July of last year. With no data ahead for the day, the focus will continue to be on the expectation for the future for what may happen in the US.
Short-term outlook
The bearish bias remains firm. The 1.1450 / 55 zone for now is the support that contained the lows. Below will follow 1.1420. To the upside, the first resistance appears at 1.1475, followed by 1.1490 and then 1.1520. Just a return on the latter would alleviate negative pressures.
The previous floor break on Wednesday deteriorated the outlook for the euro considerably, leaving the euro vulnerable to further declines. Now the EUR / USD seems to be looking for a new level of equilibrium, lower.
Technical levels
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