EUR/USD Takes advantage of the US holiday to move 1.0758 - 1.10

22 Kas 2023

The EUR/USD exchange rate experienced a break below 1.0900, reaching a low of 1,0849, driven by a stronger US Dollar in response to US economic data. However, losses have been reduced in the last few hours due to a waning momentum in the US Dollar attributed to an improved risk appetite. Currently, the exchange rate is in negative territory, with daily technical indicators showing a correction from overbought conditions but still well above moving averages.

Overall, the ongoing decline appears corrective after the failure to extend gains beyond the 61.8% Fibonacci retracement level of the previous descent. In the short term, the risk is tilted to the downside with signals from the 4-hour indicators, but further declines seem unlikely in the near term. The exchange rate hovers around 1.0900 as financial markets seek reasons to continue selling the US Dollar, with limited activity expected due to the Thanksgiving holiday in the United States.

The Fed minutes brought no new developments, reiterating concerns about inflation and a willingness to take action if necessary. The likelihood of interest rate hikes remains low, and monetary policy is expected to remain restrictive to achieve the 2% inflation target. Additionally, the price may now undergo a slight pullback around 1.0758 before continuing towards 1.10, taking advantage of the pause during the Thanksgiving holiday.