Without EUR/USD adjusting to gains above 1.10 negative resistance during the off days, however, weak inflation adjustment on Thursday could keep the pair supported above 1.09 until the end of the week. According to forex market trends, the euro has started 2024 on a weak footing against the US dollar, retreating from a multi-month high at the end of the year of 1.1139 to trade at 1.0960 at the time of writing.
The US fundamentals made their major moves in the first week of the new year 2024, supported by lower implied expectations in the market, in addition to the reduction of preferred interest rates by the Federal Reserve US decisions in 2024, which followed a series of data releases with cuts. The best of the best. Decided to fundamentally reassess US Fed outlook as EUR/USD approaches the 200-week moving average, which has stalled just below 1.1150, after remaining very light.
The Year In Signs Wind chart is expected to offer a great forecast for the EUR, which could limit any potential upside in the EUR. Commenting on the future price of the specified diameter. “We still see gains above the 1.10 resistance for EUR/USD being within reach,” says Francesco Pisol, forex analyst at ING Bank. It has contributed to the current EUR/USD push with multiple sentiments and spreads in the performance of stocks, while the correlation with spreads to achieve short-term targets has weakened in the latter part of 2023. It shows that there needs to be a strong case for global stocks, especially outperforming European stocks, the tower the husband. EUR/USD in full.
He concluded this by saying: “By the way, they were able to achieve a stabilization/correction in the performance of global stocks against the action taken in November/December, which could allow the re-pegging of spreads with the euro against the dollar.” “If this happens, the market is not in a favorable position, because the two-year swap spread is still wide at -125 basis points, some of which is detailed to the European Central Bank (ECB) interest rate forecasts and will not bring the spread back to within the range.”
In general, the data correction in the euro zone is an adjustment this week, as orders under the contract did not disappoint Germany, while German industrial production numbers for November will be released today, Tuesday. Eurozone-wide economic regulations and retail sales for employees are scheduled to be issued (tomorrow), but at ING they discovered that these factors were not implemented in the market.
On another level. ECB Governing Council members Villeroy, Isabelle Schnabel and Philip Lane will provide comments that could provide some interest throughout the week. Some considerations have recently been made against interest rate cut bets, especially after their rebound in December, although they have managed to consistently outperform the ECB's comments of late.
Such a sky could provide the Euro with some support in the near future. Overall we still see EUR/USD on unprepared ground for this sector, any positive impact from weaker US data/better Eurozone data may be more on target than smaller corrections. We target a return to the 1.08 support level over the course of this ministry.
The main economic release for EUR/USD will be this week's inflation indicator, due on Thursday. The market rate is expected to reach 3.2% on an annual basis in December, up from 3.1% in November, with a monthly push of 0.2%. Inflation is expected to reach 3.8% year-on-year, down from 4.0%. The rule of thumb is that if this exceeds expectations, the dollar will fall, and the market reaction will become more pronounced the greater the divergence.
Given this, labor market data has not yet begun to be the main factor in US policy differences post-pause, and the release of the US sales price index this week is much more important. However, last Friday's Strong Forces report was a reminder that the US economy still managed to deliver the highest readings of the group; Therefore, dollar strength may be on the agenda this week again.
Technical Analysis of the EUR/USD
There is no development from the technical point of view in the performance of the price of the US Dollar EUR/USD 2023 currency pair towards the 1.1140 resistance level, its highest level in five months. Moving below the 1.100 level gives the bears enough momentum to move down, and currently the most important support levels for the Euro/Dollar are 1.0880 and 1.0790, respectively, and the last level will move the technical indicators towards strong saturation levels for selling.
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