EUR/USD H4 chart – Analysis Made By REVOLVER™ and ISOTRIUMPH™ Indicators.
EUR/USD Eyes 1.1200: Technical Momentum Fueled by Dovish Fed Expectations
In a striking ascent, the EUR/USD pair is surging towards the major resistance at the 1.1150 level, signaling a bullish momentum that aims to breach the psychological threshold of 1.1200. The Euro (EUR) maintains its winning streak, gaining ground against the subdued US Dollar (USD). This favorable trend is largely attributed to the anticipated dovish stance of the US Federal Reserve (Fed) concerning the future trajectory of interest rates.
Dovish Fed Expectations:
Building on our previous analysis, the EUR’s upward trajectory appears to be continuing, supported by a combination of factors. The market sentiment is influenced by the expectation that the Federal Reserve (Fed) may adopt a dovish stance on interest rates in the coming year. With US yields trending lower and market participants anticipating rate cuts, the US Dollar faces headwinds. Concurrently, equity prices remain near recent highs, contributing to the sustained pressure on the US Dollar, particularly in the context of holiday-thinned trading.
Upcoming Data and Holiday Impact:
Amid the holiday season, Wednesday saw no significant reports, setting the stage for Thursday’s focus on the US weekly Jobless Claims. Additionally, attention will be directed towards Spain’s preliminary inflation figures for December, set to be released on Friday.
Looking Ahead:
As the year 2023 draws to a close, the calm waters in the market continue to weigh on the US Dollar, offering further support to the EUR/USD pair’s upward momentum. However, as markets transition back to normal functioning in the upcoming week, the focus will shift to crucial US employment data. The outcome of these economic indicators could potentially shape the currency landscape as the new year unfolds.
The EUR/USD pair’s bullish trajectory towards 1.1200 is a testament to the prevailing market sentiment, driven by expectations of a dovish Federal Reserve. As the year concludes, the subdued US Dollar faces challenges, with the EUR maintaining its winning streak. Traders and investors will closely monitor upcoming economic data and the return to normal market conditions in the new year, as they seek to navigate the evolving dynamics of the currency markets.
EUR/USD Forex chart – Analysis Made By REVOLVER™ and ISOTRIUMPH™ Indicators.
Short-Term Setup | Our preference:
Long positions above 1.09500 with targets at 1.1150 & 1.1200 in extension.
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