- The EUR/USD pair rises to 1.0833, driven by the expansion of the Eurozone current account surplus and the calm of the US market.
- ECB wage data and Lagarde's statements indicate a moderate relaxation stance, pending first quarter data.
- The US leading index and upcoming FOMC minutes are expected to guide EUR/USD amid varying expectations.
The Euro extended its losses during the North American session, surpassing the 1.0800 level after Eurozone (EU) current account data beat estimates. An absent economic calendar in the United States (US) after a holiday weakened the Dollar. The pair EUR/USD is trading at 1.0833, up 0.52% on the day.
EUR/USD extends gains on Eurozone strength, eyes on Minutes
The EU Current Account surplus increased in December, exceeding estimates, and stood at €31.9 billion, up from €22.5 billion the previous month, on a seasonally adjusted basis. This means that, according to annual figures, the EU surplus rose to 1.8% of the bloc's GDP from a deficit of 0.6% the previous year.
On the other hand, the European Central Bank (ECB) released its wage settlement indicator for the fourth quarter of last year. Liquidations fell from 4.7% year-on-year to 4.5%. ECB President Christine Lagarde said wage data will be vital in deciding when to start monetary easing. According to BBG analysts, “ECB officials would probably like to see first-quarter wage data (expected in May) before cutting rates, pointing to June as the most likely option.” The market is pricing the odds of a cut at less than 10% on March 7, rising to 45% on April 11 and fully priced in on June 6.”
On the other hand, the US economic agenda remains light, although the US Conference Board is expected to reveal the January flash index, which is estimated to fall 0.3% month-on-month. On Wednesday, the calendar will accelerate, with the release of the latest minutes from the Federal Open Market Committee (FOMC) and Fed spokespeople giving statements.
EUR/USD Price Analysis: Technical Outlook
The pair has jumped higher, on fundamental news from the EU, and is testing the resistance of the 200-day moving average (DMA) at 1.0826. A daily close above that level could exacerbate a recovery towards 1.0900, but it would need to reclaim the 50-DMA at 1.0891 first. The bullish zone is around 1.0950. On the contrary, if EUR/USD sellers keep the exchange rate below the 200-DMA, that could open the door to push the price below 1.0800. Once broken, the next stop would be the February 20 low at 1.0761.
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.
