Eurusd falls amid mixed economic signals from US and Euro Area

EURUSD Analysis

Performance after Tuesday
Period	Pct	Chg	Momentum
Tuesday	-0.41%	-42.6 Pips
Week to-date	0.34%	35.2 Pips
January	-0.63%	-65.7 Pips

Upcoming key events (London Time)

Wed 07:00 PM USD FOMC Meeting Minutes

What happened lately

The latest U.S. Job Openings and Labor Turnover Survey indicated a robust increase in job openings in November, climbing to 8.098 million from October’s revised figure of 7.744 million. This shows continued demand for labor in the American market as reported by the Bureau of Labor Statistics. However, this positive jobs data contrasts with a 0.4% contraction in new orders for manufactured goods, following a slight increase in October, according to the Census Bureau. This decline could signify some challenges in manufacturing activities despite the labor market’s strength.

In the Euro Area, Eurostat’s reports highlighted an encouraging increase in consumer prices. The Harmonised Index of Consumer Prices (HICP) for December’s flash estimate rose to 0.4% from -0.3% in November, whereas the core HICP increased to 2.8% from 2.7% in November. The 12-month HICP estimate also showed a rise to 2.4% in December from 2.2% in November. The steady Euro Area unemployment rate at 6.3% in November, along with these inflation statistics, reflects some stability in the region’s labor and consumer prices. Additionally, the Euro Area sentix Economic Index fell slightly, indicating some economic sentiment challenges as it moved to -17.7 in January from -17.5 in December.

For Germany, significant increases were observed in consumer price indices. The December flash estimate for the 12-month Harmonised Index of Consumer Prices (HICP) rose to 2.9% compared to November’s 2.4%, as per Destatis. Monthly changes also marked an increase to 0.7% from -0.7% in November, signaling upward pressures on prices. Moreover, the CPI inflation rate in the flash estimate for December rose to 2.6% from 2.2% in November, with the monthly rate reaching 0.4% from -0.2%, all indicative of rising inflation in Germany.

The mixed economic data from the United States and the Euro Area’s increasing inflation create a complex backdrop for the EURUSD currency pair. The USD strength, driven by robust job data, might have contributed to EURUSD’s decline by -0.41% to 1.03405. Euro Area’s increasing inflation could spur expectations of monetary policy adjustments, potentially supporting the euro. However, the upcoming U.S. FOMC Meeting Minutes might further influence USD movements, and investors would closely monitor these policy insights concerning future interest rate decisions, adding to the EURUSD volatility.

Latest from X (Twitter)

Tweets by Eurostat

What can we expect from EURUSD today?

EURUSD on Tuesday dropped -0.41% to 1.03405. Price is below 9-Day EMA while Stochastic is rising.

Updated daily direction for EURUSD looks bearish as the pair posted lower in Tuesday trading session.

Looking ahead for the day, immediate support level is at S1 1.03074 with break below could see further selling pressure towards S2 at 1.02743. To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 1.04344 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 1.03378 would indicate selling pressure.

For the week to-date, take note that EURUSD is mixed as compared to the prior week.

Key levels to watch out:

#EURUSD Trending on Twitter

[custom-twitter-feeds hashtag=”#EURUSD” num=3 showheader=false]