Bulls are still looking for more motivation to move the EURO/DOLLAR exchange rate above the psychological resistance of 1.1000 to change direction to the upside. Since the start of trading this week, the EUR/USD exchange rate has not found the momentum to do so. As the results of recent economic data have not been as favourable to the euro as they have been supportive of the US dollar. Clearly, the case with the announcement of the rise of the US consumer confidence index for the second consecutive month to 110.7 in December from 101 in November. Obviously, this was much better than analysts’ expectations of 104.5 and the highest reading since July.
So, the question now is: what is expected for the EUR/USD pair for the year 2024?
The EURO/DOLLAR could reach the resistance of 1.11 before the start of a difficult 2024.
In this regard, according to a forecast briefing for next year 2024 from one of the largest banks in Scandinavia, the EUR/USD exchange rate could rise to the 1.11 resistance before the decline begins for several months. Moreover, this expectation is consistent with the fact that global financial markets are trapped in a period of improving sentiment that tends to benefit the euro and the dollar. Thanks to growing confidence that global inflation will fall further and allow central banks to cut interest rates over the coming months.
For his part, Stefan Melin, senior forex analyst at Danske Bank, says: “We are looking to buy on dips in the near term.” Adding, “In the near term, we still see good opportunities for the US dollar to weaken against the backdrop of the significant easing in financial conditions over the past month, coinciding with the US dollar’s declining season at the end of the year.”
Meanwhile, the latest forecast from Danske Bank indicates that analysts are anticipating the Euro to Dollar exchange rate (EUR/USD) to reach 1.11 within one month. However, "looking ahead, it seems that European investors will continue to be compelled to pay for hedging against exposure to the U.S. dollar in the coming year, despite the reduced cost, which may decrease further next year as the U.S. Federal Reserve lowers interest rates first."
According to Danske Bank analyst, whether the euro/dollar pair (EUR/USD) remains around the current level or declines next year, there are good arguments for the continued decline of the pair. These arguments include relative productivity, trade conditions in the energy sector, and financial sustainability, among others. Therefore, any increase in the EUR/USD in the next month may open the door to some highly attractive short-selling opportunities.
In general, Danske Bank expects the EUR/USD to trade at lower levels over the next 6-12 months based on relative trade conditions, real rates (growth prospects), and relative unit Labor costs. Also, Danske Bank adopts a strategic bearish trend for the EUR/USD pair, anticipating a decline to 1.10 in three months, 1.07 in six months, and 1.05 in twelve months. Shortly, this puts them in line with a consensus that anticipates a sustained decline in the dollar in 2024, allowing for the stabilization of the EUR/USD conversion rates.
EUR/USD Technical Analysis Today:
According to the performance on the daily time frame chart, if the price of the EUR/USD fails to move above the psychological resistance of 1.1000. technically, head and shoulders formation may appear over that time period, and if the euro does not gain positive momentum, profit-taking sales operations may be activated. Once again, the currency pair will abandon the last attempt to rise if it collapses to the 1.0830 support again. Therefore, we still prefer selling EUR/USD from every rising level. Today's economic calendar is devoid of important data for the Eurozone, and the focus will be on the American data. Furthermore, that’s led by the announcement of the GDP growth rate, the number of weekly unemployed claims, and the reading of the Philadelphia Industrial Index.
Today's EUR/USD Recommendation: Sell from the resistance level 1.1020, target 1.0860, and stop 1.1100. 
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