- The US Michigan Consumer Confidence Index improved to 59.1 in December.
- The uncertainty surrounding the US Federal Reserve’s choice weighs on temper.
- EUR/USD eases following upbeat US information however holds above 1.0500.
Despite a knee-jerk mid-week, the EUR/USD pair is comfortably buying and selling above the 1.0500 threshold, seesawing round 1.0530 following the launch of the December University of Michigan’s (UoM) Consumer Confidence Index, which rose by greater than anticipated, to 59.1 from 56.8 in November. Market gamers had anticipated a setback to 53.3
Upbeat US information helped the US Dollar by the finish of the week amid a deteriorating market sentiment. US indexes turned decrease with the launch, as speculative curiosity anticipates a probably aggressive US Federal Reserve. The central financial institution has anticipated it might sluggish the tempo of quantitative tightening, and Chair Jerome Powell hinted it may occur as quickly as this month.
However, resilient macroeconomic information leaves the door open for one more 75 bps hike, ahead of a smaller one. Recession considerations add to the dismal temper, as the larger price goes, the larger are the possibilities of an financial setback.
EUR/USD technical perspective
According to Valeria Bednarik, FXStreet.com chief analyst, “The EUR/USD pair weekly chart shows that the pair posted a higher high and a higher low, maintaining the risk skewed to the upside. The same chart shows that the 20 Simple Moving Average (SMA) advances far below the current level, at around 1.0080, while technical indicators consolidate near overbought readings, all of which favors a bullish continuation. Finally, the 100 SMA is crossing below the 200 SMA, both far above the current level, losing relevance as a bearish signal.”
She additionally added that “ EUR/USD needs to break above 1.0580 to be able to extend its gains towards 1.0620 first, and 1.0700 later. A break above the latter should bring the 1.1000 figure to the table. Buyers stand at around 1.0490, while the next support level is 1.0420. An unlikely slide below the latter could favor a downward extension towards 1.0300.”
