EURUSD | Will today be the day of the dollar?

١٦ يناير

The EUR/USD pair is descending towards 1.0900, with the US dollar rising for the fourth consecutive day, influenced by geopolitical tensions in the Middle East. Despite hawkish comments from the ECB, the euro is struggling to gain ground. If the EUR/USD breaks the 2024 low at 1.0892, it may test the 200-day SMA at 1.0847. Below this level, further declines could occur. On the other hand, a breakout to the upside could encounter resistance at 1.0998 and 1.1139. The 4-hour chart indicates a consolidative mood, with the MACD showing signs of recovery, but the RSI remaining flat below the 50 threshold, suggesting a ranging trade. The week starts with uncertainty, as the market reacts to reduced volatility and thin trading conditions following the holidays in the United States. Hawkish comments from the ECB contrast with the outlook for rate cuts. The debate between market participants and the ECB regarding the timing of interest rate reductions continues. High inflation and mixed economic data in Europe influence the outlook. In the United States, there is a 70% probability of a Fed interest rate cut in March. European economic data shows a contraction in German GDP in 2023 and a decline in industrial production. We will see if today will be a hawkish day, expecting a downside break with a retest of the highlighted area in white in case of a strong dollar. Alternatively, an upward push with a trendline break and subsequent retest. Greetings and have a good trading day.