Bullish view
- Buy the EUR/USD pair and set a take-profit at 1.1915.
- Add a stop-loss at 1.1650.
- Timeline: 1-333 days.
Bearish view
- Sell the EUR/USD pair and set a take-profit at 1.1650.
- Add a stop-loss at 1.1915.
The EUR/USD exchange rate pulled back slightly as market risks rose in the final week of the year. It dropped slightly to 1.1758, down from this month's high of 1.1817, as traders eye the upcoming Federal Reserve minutes.
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Fed to Publish Minutes of the Last Meeting
The EUR/USD exchange rate pulled back slightly as investors moved to the safety of the US dollar after a report showed that the housing market was doing well. This report showed that pending home sales rose by 3.3% MoM in November this year after growing by 2.4% in October.
Pending home sales rose by 2.6% YoY after falling by 0.4% in the previous month. These numbers mean that the housing market is starting to improve as mortgage rates fall.
Looking ahead, the US will publish the latest house price index report, which will provide more information about the housing sector. Economists polled by Reuters expect the upcoming report to show that the house price index rose by 1.7% in October.
The most important catalyst for the pair will be the upcoming minutes of the last monetary policy meeting by the Federal Reserve. The bank decided to slash interest rates by 0.25% in that meeting, bringing the total cuts this year to 75 basis points n
These minutes will provide more information about the deliberations that happened during that meeting as three officials voted against the cut. Stephen Miran voted to cut rates by 50 basis points, while Jeff Schmid and Austan Goolsbee voted against the cut, pointing to the elevated inflation in the country.
The other minor catalyst for the EUR/USD exchange rate will be the latest Spanish consumer inflation. Economists expect the data to show that the preliminary inflation rose from 2.8% in November to 3% in December.
EUR/USD Technical Analysis
The daily chart shows that the EUR/USD exchange rate pulled back slightly to 1.1762 from this month's high of 1.1817.
Still, the pair has remained above the Supertrend indicator, which is a highly bullish sign. It has moved above the 50-day Exponential Moving Average (EMA).
Therefore, the pair will likely continue rising as bulls target the year-to-date high of 1.1915, its highest point this year. A move above that level will point to more gains, potentially to the psychological level at 1.2000.
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