EUR/USD Fails to Hold Above 1.0700 Amid Holiday-Thinned Trading
Alex Boltyan | Jan 02, 2023 04:15PM ET
The shared currency posted minor losses against the dollar in the 2023 first trading session amid weak PMI data from Germany and the eurozone and thin trading conditions. The bond and stock markets in Europe and the US remained closed due to the New Year holiday.
At the time of writing, the EUR/USD trades at the 1.0665 area, 0.32% below its opening price, while the dollar measured by the DXY index trades virtually unchanged at 103.50.
German Manufacturing PMI came in at 47.1 in December, slightly below the initial estimate of 47.4, while the Eurozone's came in at 47.8, matching the flash estimate.
Chris Williamson, Chief Business Economist at S&P Market Intelligence, commented on the report saying, "risks to the demand outlook remain skewed to the downside with the global economic backdrop darkening and eurozone interest rates rising again in December."
In the absence of first-tier macroeconomic data releases and while the US and European markets were closed, most pairs traded within narrow ranges across the FX market.
From a technical view, the daily chart shows that the EUR/USD short-term outlook remains slightly bullish, as the price trades above its main moving averages. However, indicators are sending mixed signals as the RSI turned south but hovers above its midline while the MACD prints decreasing red bars.
On the upside, the EUR/USD needs to break above the 1.0700 mark to regain bullish momentum, aiming at December's monthly high of 1.0736. On the other hand, the 20-day SMA around 1.0603 stands as immediate support, followed by the 1.0530 and 1.0500 areas.
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