- EUR/USD has pulled back below 1.1250 from previous highs at 1.1275, having rejected resistance.
- Currency markets are digesting the latest data releases from the Eurozone and the US and the Fed is speaking.
- After the surprises to the upside in inflation in the euro zone, some analysts have been pointing to the risk of a more aggressive ECB on Thursday.
After rejecting resistance at 1.1270 and pulling back from session highs below the 1.1250 level, it looks like bears in the EUR/USD they are coming back Having risen as much as 0.4% earlier in the session, EUR/USD has returned to trading sideways at the 1.1240 area as traders continue to digest the latest data releases from the Eurozone and US and members of the Fed continue to give statements. Recently released US ISM Manufacturing PMI survey data for January showed manufacturing activity growth was the weakest since November 2020, with pandemic-related issues such as labor shortages and supply chain delays, which worsened last month with the spread of Omicron.
As usual, the employment report on Friday will be the most important data of the week; The headline NFP figure is expected to be weak with Ómicron slowing labor market turnover. Fed policymakers this week have marked wage growth and measures of labor market slack as the most important metrics to watch. Speaking of the Fed, the message from politicians this week has been consistent; a March rate hike enjoys broad support, but there is less certainty about the pace of tightening through the rest of 2022. Fed members have expressed a desire to retain the option to go slower or faster depending on the economic developments and most said a 50bp move in March was possible, but not the expected scenario.
As Fed members speak, US data and its impact on Fed tightening expectations will remain a key driver for EUR/USD for the rest of the week, traders should not ignore market fundamentals. the euro zone. After upside surprises in inflation from France, Germany and Spain this week (implying an upside surprise in aggregate eurozone inflation figures on Wednesday), some analysts have been signaling the risk of a weaker ECB. aggressive Thursday. Eurozone money markets priced in an 80% chance of a 25bp rate hike by the bank from October. Any hint about the conditions for a rate hike in 2022 could light a fire under EUR/USD and send it back to 1.1350.
Technical levels
EUR/USD
| Panorama | |
|---|---|
| Last Price Today | 1.1249 |
| Today’s Daily Change | 0.0014 |
| Today’s Daily Change % | 0.12 |
| Today’s Daily Opening | 1.1235 |
| Trends | |
|---|---|
| 20 Daily SMA | 1.1318 |
| 50 Daily SMA | 1.1307 |
| 100 Daily SMA | 1.1445 |
| 200 Daily SMA | 1.1692 |
| levels | |
|---|---|
| Previous Daily High | 1.1248 |
| Previous Daily Minimum | 1.1138 |
| Previous Maximum Weekly | 1.1347 |
| Previous Weekly Minimum | 1.1121 |
| Monthly Prior Maximum | 1.1483 |
| Previous Monthly Minimum | 1.1121 |
| Daily Fibonacci 38.2% | 1.1206 |
| Daily Fibonacci 61.8% | 1,118 |
| Daily Pivot Point S1 | 1.1166 |
| Daily Pivot Point S2 | 1.1098 |
| Daily Pivot Point S3 | 1.1057 |
| Daily Pivot Point R1 | 1.1276 |
| Daily Pivot Point R2 | 1.1317 |
| Daily Pivot Point R3 | 1.1386 |
Source: Fx Street
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