EUR/USD Pair Moving Towards 200-EMA after Recording 4% Value Increase Per Week
Soon after the publication of the Consumer Price Index report, which suggested the US Federal Reserve reducing the rates, Euro ended the week on a positive note.
As resultantly, USD looks strong as it has been able to postpone the losses that it was accruing for the past four weeks. The momentum for EUR/USD came from the USD value increase which allowed EUR in advancing.
The week ended at a 1.42% value gain by EUR/USD pair and currently is trading at a value of 1.0352.
CPI’s Effects on USD
Solid gains were evident, particularly in Wall Street.
According to the inflation report published in the US, it revealed that CPI has lessened by almost 6.6% which, in September 2021, was 6.3%. It clearly shows that CPI is well below the past year’s estimate.
On the other hand, November’s Consumer Sentiment of the University of Michigan (UoM) was reportedly down by 54.7. It was further noted that the downward in UoM Consumer Sentiment was the lowest in the past four months.
It was particularly on 11th November (Friday) when EUR/USD saw its rally expanding after a quick rebound from the dip.
As a consequence of the dip, the currency pair saw its value decline as low as 1.0163. Currently, the pair is moving in the direction of hitting its daily high of 1.0364.
Analysts Predict 50 bps increase by Fed In December
More or less, in each month, Federal Reserve has kept on increasing the rate by at least 75 bps.
However, considering the Fed Chairman’s statement that Fed doesn’t need to be hawkish this time, they are expecting a decrease in the Fed’s rates.
According to a number of investors and traders, Fed would not be increasing the rates above 50 bps. Their assumption is further supported by the release of data pertaining to inflation in the US.
CPI pertaining to Germany saw the index hiked by 10.4% which is very much in line with the expected estimate.
On the other hand, October’s Harmonized Index of Consumer Prices (HICP), pertaining to Germany, went past September’s data. Currently, October’s index is at 11.6% which is evidently 0.7% higher than September’s.
Future Price Projections for EUR/USD
Although EUR/USD seems smoothly nearing the 10th August high of 1.0364, however, the pair is still falling short of surpassing its daily average threshold.
Subsequently, EUR/USD’s 200-day Exponential Moving Average might be hindered at a value of 1.0438.
It is obvious that the core resistance level for the currency pair is the 10th August high which was 1.0364. Otherwise, hindering EMA seems unavoidable.
Currently, the pair is trying to get to the 1.0300 level which is the pair’s first support level.