EUR/USD Consolidates Above Critical Support
Alex Boltyan | Dec 20, 2022 03:12PM ET
The EUR/USD pair trades virtually unchanged on Tuesday, holding above the 1.0600 level as investors remain in wait-and-see mode after an eventful week.
At the time of writing, the EUR/USD pair is trading flat at the 1.0610 area, having pulled back from a daily high of 1.0658. Meanwhile, the dollar measured by the DXY index posts a 0.58% daily loss at around 104.05 despite the advance of U.S. yields across the curve after the Bank of Japan policy tweak.
On the data front, the German Producer Price Index grew by 28.2% over the 12 months to November, decelerating from its previous rate of 34.5% and below the market's consensus of 30%.
Across the pond, housing data came in softer-than-expected, also weighing on the greenback. Building Permits fell by 11.2% in November, while Housing Starts declined by 0.5% in the same period.
From a technical perspective, the EUR/USD short-term bias remains bullish as the shared currency continues to trade above its main moving averages on the daily chart and above a broken trendline drawn from May 2021 highs.
Still, indicators are losing bullish momentum, which could see the pair entering a consolidation phase. The RSI is flat above its midline, but the MACD has printed a higher red bar.
As for technical levels, the broken trendline at around the 1.0570 zone continues to offer support for the EUR/USD. Loss of this level would pave the way to retesting the 20- and 200-day SMA of 1.0510 and 1.0340, respectively.
On the other hand, resistances are seen at the 1.0660 area, this week's high, followed by the 1.0700 mark.
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