In light of the global financial markets' holiday on the occasion of Christmas and the lack of liquidity, the exchange rate of the EUR/USD currency pair remained in a limited path, between the level of 1.0594 and the level of 1.0635. In general, the euro-dollar will be affected in the coming days by the tone of the tightening or not of global central banks and the future of the global economic recovery considering these policies and the return of concern about the outbreak of the epidemic again.
Equity markets made slight gains while currencies were mixed in Asia trading Monday amid cautious trading and low liquidity with many markets closed for holidays. Accordingly, benchmark stock indices in China, Japan and South Korea rose less than 1%, with gains slightly higher than India. Other markets including Hong Kong, Singapore and Australia were closed.
Risk appetite was limited, with the positive impact of recent US inflation data partially offset by concern about China's ability to cope after abandoning the Covid Zero policy. Amid a new wave of infections, China's National Health Commission said it would stop publishing daily coronavirus case numbers, complicating the task of investors trying to assess the economic impact.
Meanwhile, data on Friday showed the Federal Reserve's closely watched gauge of cooling inflation and sluggish consumer spending. A survey conducted by the University of Michigan showed that inflation expectations for the coming year for consumers also fell this month to the lowest level since June 2021. And while US stocks closed higher on Friday, the S&P 500 and Nasdaq 100 indexes of technology companies are still posting weekly losses. Looking at global stocks over the year, 2022 was the worst annual performance in more than a decade.
Euro predictions against the dollar today:
- The EUR/USD exchange rate is still stable at the forefront of breaking the general trend and moving downwards.
- The pair's direction may change if it moves towards the support levels 1.0540 and 1.0470, respectively.
- On the other hand, the break of the resistance 1.0730 will be important for the bulls to rule for a while.
- It must be taken into account that the global market holidays on the occasion of Christmas and the reluctance of investors affect liquidity and, accordingly, the performance of the forex currency market. Therefore it is necessary not to venture until the markets return to the nature of their work.
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