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EUR/USD takes offers to renew intraday low near 1.1270 heading into Wednesday’s European session.
The major currency pair rose during the last two days amid optimism concerning the US stimulus and Omicron. However, fears of worsening virus cases, geopolitical challenges, and fiscal stimulus updates weigh on the market sentiment ahead of this week’s key US data.
Possible Scenario for the market :
The pair will most likely be Bearish for the next period of time and it will be headed to the support line located at 1.12000. but before that happens we could be seeing a small push that will allow the pair to reach the first resistance 1.13040 or even the second resistance 1.13356 before dropping back down to the 1.12000 range.
Technical indicators show :
1) The market is below the 5 10 20 50 100 and 200 MA and EMA (Strong Bearish Sign) 2) The MACD is below the 0 line, indicating a Bearish market with a positive crossover between the MACD line and the Signal line. 3) The RSI is at 43.98 moving at the lower end, which shows weakness in the market.
Support & Resistance points : support Resistance 1) 1.1261 1) 1.1304 2) 1.1239 2) 1.1325 3) 1.1218 3) 1.1347
Fundamental point of view :
news that the US appoints a new Tibet Coordinator amid tensions with China joins the tension with Russia to weigh on the risk appetite and underpin the US dollar’s safe-haven demand.
On the contrary, indecision amid the European Central Bank (ECB) policymakers over the inflation stance, versus the Fed’s clear view, weigh on the EUR/USD prices. Recently, ECB policymaker and Slovak central bank Governor Peter Kazimir said, “There is a risk that elevated inflation will stay for a longer time.”
Against this backdrop, the US 10-year Treasury yields dropped two basis points (bps) to 1.465% whereas the S&P 500 Futures decline 0.13% intraday even as the Wall Street benchmarks snapped a three-day downtrend. Further, the US Dollar Index (DXY) snaps a two-day downtrend to gain, up 0.12% intraday around 96.55 at the latest.
It’s worth noting that a lack of market moves during the year-end holiday season may restrict short-term EUR/USD prices even as the bears keep the controls. That said, Omicron updates and US stimulus chatters could entertain traders ahead of the US final Q3 GDP and the CB Consumer Confidence for December.
This is my personal opinion done with technical analysis of the market price and research online from Fundamental Analysts and News for The Fundamental point of view, not financial advice. If you have any questions please ask and have a great day !!