The minutes of the last meeting of the US Federal Reserve reiterated that the timing of raising US interest rates has become closer than previously thought.
The euro rallied significantly on Wednesday to reach towards the top of what has been a relatively well-defined trading range.
The price of the euro against the dollar entered 2022 with its highest levels in six weeks, but there will be a strong battle to hold above the 1.13 level if the dollar returns to rise.
The euro went back and forth on Tuesday, showing a real hesitation as to where we are going to go next.
As soon as investors returned to the markets and liquidity was available after the holiday season, they interacted with the danger posed by the new Corona variable, Omicron.
The euro tried slightly at the open to rally on Monday, but as you can see, we have fallen rather hard since then to crash into the previous support level.
On different days in January 2021, the price of the euro currency pair against the dollar, (EUR/USD) jumped to the vicinity of the resistance 1.2350, its highest since April of the year 2018.
I have said that during this last week of 2021, price movements will not be stable and may lack the strong movement required for trading.
The euro went back and forth on Wednesday as we continue to see volatility.
The EUR/USD has maintained its recovery from November lows below the 1.12 support but has repeatedly turned away from technical resistance near the 1.1356 level.
For five trading sessions in a row, the rebound gains for the EUR/USD stopped at the resistance level 1.1433, waiting for stronger catalysts to continue the rebound or return to the bearish trend.
The EUR/USD is back above the 1.13 level again in light of the rising global market wave before the holidays after studies indicated that Omicron is mild.
Despite the announcement of better-than-expected GDP growth for the US, the US dollar declined amid profit-taking before the holidays.
The euro rallied a bit on Wednesday to reach the top of the overall consolidation area that I have marked on the chart.
There is nothing new about the weak euro, as the European pandemic restrictions may weaken the economic activity of the bloc, and thus appetite for the euro.