EUR/USD Slides Below 1.0800 After ECB Considers Slower Hikes
Alex Boltyan | Jan 17, 2023 03:12PM ET
The EUR/USD pair fell for a third day in a row on Tuesday, briefly dipping below the 1.0800 level, as the euro weakened amid rumors the European Central Bank (ECB) will slow down the pace of rate tightening.
At the time of writing, the EUR/USD pair is trading at the 1.0800 zone, 0.18% below its opening price, as it continues to back away from a nine-month high of 1.0874.
The euro took a hit after reports that the European Central Bank policymakers are considering a slower pace of interest rate hikes after a 50 basis points increase in February.
Still, the dollar remains unable to gather enough momentum, limiting EUR/USD slide, amid expectations the Fed is also slowing the pace of rate hikes. The WIRP tool suggests a 25 bp move is already priced in by investors, with only 10% odds of a 50 bp increase seen at the Feb. 1 meeting.
On the data front, the German annual inflation rate for December was confirmed at 9.6%, measured by the Harmonized Index of Consumer Prices, while ZEW survey data offered an optimistic picture of economic sentiment amongst German and Eurozone citizens. On Wednesday, the U.S. will unveil Producer Price Index, retail sales and industrial production figures for December.
From a technical standpoint, the EUR/USD maintains a bullish perspective according to indicators on the daily chart despite the price making lower lows. The RSI has turned south but remains well into positive ground, while the MACD is printing lower green bars reflecting the dwindling bullish momentum.
If the EUR/USD loses the 1.0770 area, it could find next support levels at 1.0700 and then at the 20-day SMA around 1.0680. On the flip side, if the euro manages to break above the 1.0875 zone, it could pave the way toward the 1.0900 Fibonacci level en route to the 1.0935 zone.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.