EUR/USD Rises Above 1.1000 Amid Dollar Weakness and ECB Support
The EUR/USD pair shows modest gains, reaching its highest level in four months during the early hours of Asian trading on Friday. The weakened U.S. dollar and the European Central Bank's hawkish stance have bolstered this currency pair. Trading around 1.1008, the main currency pair has increased by 0.05% for the day. The EUR/USD rate is poised to close at its highest daily level since early August on Thursday but still remains below the psychological 1.1000 level. From a technical perspective, breaking above 1.1000 could open the door for further upward movement. However, considering current market conditions, the timing for a breakout may not be ideal for Euro bulls. Technical indicators on the daily chart lean towards an upward bias, indicating a potential breakout. The Euro's prospects will weaken with a daily close below 1.0870.
On the 4-hour chart, technical indicators do not align with the daily chart's upward movement. The Relative Strength Index (RSI) is sideways and poised to turn downward, momentum is weak, and the Moving Average Convergence Divergence (MACD) does not provide clear signals. However, the price remains above the 20-period Simple Moving Average (SMA). As long as it stays above 1.0950, the odds favor the 1.1000 breakout. A dip below that level would weaken the Euro in the short term, indicating the next support level at 1.0910. EUR/USD rose on Thursday towards the 1.1000 level, driven by the dollar's recent weakness, despite higher bond yields. Contradictory economic data from the U.S. precedes crucial consumer inflation data scheduled for Friday.
U.S. data reveals a decline in the Philly Fed Index, a revised Q3 GDP decrease from 5.2% to 4.9%, and Initial Jobless Claims showing little change from the previous week. On Friday, the preferred inflation measure of the Federal Reserve, the Core Personal Consumption Expenditures (Core PCE) Index, is due, with an expected 0.2% increase for November.
Market participants will closely scrutinize U.S. inflation figures, which could impact the U.S. dollar, currently under pressure despite a rebound in U.S. yields. The 10-year Treasury bond yield rose from recent lows to 3.90%. EUR/USD continues to benefit from a weaker U.S. dollar, but the upward momentum seems restricted in thin market conditions.
On the 4-hour chart, technical indicators do not align with the daily chart's upward movement. The Relative Strength Index (RSI) is sideways and poised to turn downward, momentum is weak, and the Moving Average Convergence Divergence (MACD) does not provide clear signals. However, the price remains above the 20-period Simple Moving Average (SMA). As long as it stays above 1.0950, the odds favor the 1.1000 breakout. A dip below that level would weaken the Euro in the short term, indicating the next support level at 1.0910. EUR/USD rose on Thursday towards the 1.1000 level, driven by the dollar's recent weakness, despite higher bond yields. Contradictory economic data from the U.S. precedes crucial consumer inflation data scheduled for Friday.
U.S. data reveals a decline in the Philly Fed Index, a revised Q3 GDP decrease from 5.2% to 4.9%, and Initial Jobless Claims showing little change from the previous week. On Friday, the preferred inflation measure of the Federal Reserve, the Core Personal Consumption Expenditures (Core PCE) Index, is due, with an expected 0.2% increase for November.
Market participants will closely scrutinize U.S. inflation figures, which could impact the U.S. dollar, currently under pressure despite a rebound in U.S. yields. The 10-year Treasury bond yield rose from recent lows to 3.90%. EUR/USD continues to benefit from a weaker U.S. dollar, but the upward momentum seems restricted in thin market conditions.
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