EUR/USD Holds Above 1.060 After Fed Minutes
Alex Boltyan | Jan 04, 2023 04:21PM ET
The EUR/USD pair managed to maintain altitude after economic data from the EU and the U.S. and the release of the hawkish FOMC minutes from the last December meeting.
At the time of writing, the EUR/USD pair is trading at the 1.0605 area, 0.56% above its opening price, while the dollar, measured by the US dollar index, trades at 104.26, posting a 0.41% daily loss.
The session's highlight was the release of the Federal Open Market Committee (FOMC) December meeting minutes, which showed members remained concerned about inflation levels. Even though they welcomed the last inflation reading, they want to see more evidence that inflation is on a downward path. No members anticipated rate cuts would be appropriate in 2023.
Even though the minutes triggered short-term dollar gains, they quickly faded. EUR/USD slipped to the 1.0580 area only to bounce back above the 1.0600 levels minutes after.
Earlier in the day, S&P Global released the final December PMIs figures. The Euro Zone's Services PMI was confirmed at 49.8, while the German index climbed to 49.2.
Across the pond, the Institute for Supply Management (ISM) released mixed U.S. data. The Manufacturing PMI fell to 48.4 in December from its previous reading of 49, missing the market's consensus of 48.5.
From a technical perspective, the EUR/USD short-term bias remains tilted to the upside, with indicators turning higher above their midlines on the daily chart, while the price struggles below the 20-day SMA but holds above longer-term ones.
On the downside, a critical support level could be found at the 1.0520 area, where a broken descending trendline stands. As long as the EUR/USD holds above that level, downward movements can be considered as merely corrective.
On the flip side, the 20-day SMA, currently at 1.0610, stands as immediate resistance, followed by the 1.0700 mark and the December monthly high of 1.0736.
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