EURUSD Is ready for the big bullish run towards 1.1050!

On Thursday, EUR/USD faced a significant decline of almost a hundred pips, marking its worst day in months. The Euro weakened broadly, while the US Dollar showed a mixed performance due to softer inflation and a balanced labor market in the US. Daily chart indicators suggest a downside, though the overall trend remains upward, albeit with reduced momentum. A close above 1.1000 would indicate potential for more gains, while a drop below 1.0780 could shift the bias. On the 4-hour chart, EUR/USD broke an uptrend line and is testing the 1.0890 support, with the next target at 1.0860. A break could focus on 1.0830, likely attracting buyers. Technical indicators lean negative, and the RSI approaches oversold levels, suggesting potential consolidation around 1.0900. To remove the short-term bearish bias, the Euro needs to rise above the 20-period SMA at 1.0960. The pair experienced its most significant decline in over a month, correcting from three-month highs above 1.1000, reaching a bottom at 1.0883, with a potential for short-term consolidation. Eurozone CPI rose 2.4% YoY in November, below October's 2.9%, marking the slowest annual increase since July 2021. Speculation arises about a potential ECB rate cut as inflation approaches the 2% target. The Euro lagged in the market for two consecutive days, especially against the Swiss Franc. Final Manufacturing PMI readings and a rebound in US Treasury yields supported the US Dollar despite mixed US data. Inflation remained above the Federal Reserve's target, while rising Continuing Jobless Claims indicated a softer labor market. On Friday, the release of US data, including the ISM Manufacturing PMI, is scheduled.

Comment:

The EUR/USD exchange rate is currently around 1.0900, retracting from a recent peak of 1.1017 due to concerns about inflation and a stagnant economy in the Eurozone. While technical indicators suggest a downward movement, the main trend is still upward, albeit with weakened momentum. A close above 1.1000 could signal further gains, while a drop below 1.0780 would change the outlook. On the 4-hour chart, the EUR/USD has broken an uptrend line, testing support at 1.0890. Despite negative technical indicators, the Relative Strength Index (RSI) suggests possible consolidation around 1.0900. To reverse the bearish bias, the Euro would need to surpass the 20-period Simple Moving Average (SMA) at 1.0960. The EUR/USD has experienced its most significant decline in over a month, reaching 1,0883, indicating a potential consolidation phase. Inflation in the Eurozone has increased by 2.4%, lower than the previous month. Speculation about interest rate cuts, rather than hikes, is rising. The Euro has shown weakness for two consecutive days, especially against the Swiss Franc. Mixed economic data from the United States contributes to the strength of the dollar. The upcoming release of US data, including the ISM Manufacturing PMI, could have a significant impact.