EUR/USD hovers around 1.0920, eyed on Eurozone HICP, US housing data

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  • EUR/USD currently trades near 1.0920, adding 0.01% on the day.
  • German business expectations and current conditions unexpectedly worsened in December.
  • The markets believe the Fed is done with the hiking cycle, and three rate cuts are expected next year.
  • Traders await the final reading of the Eurozone HICP and US housing data.

The EUR/USD pair hovers around 1.0920 during the early Asian trading hours on Tuesday. The critical resistance level remains at the 1.1000 psychological mark. Investors will take more cues from November’s Eurozone Harmonized Index of Consumer Prices (HICP) data, which is estimated to remain unchanged at -0.5% MoM while the Core HICP is forecast to stay at 0.6% MoM.

The IFO Institute revealed on Monday that German business expectations and current conditions unexpectedly worsened in December. The German Business Climate Index came in at 86.4 in December versus 87.2 prior, below the expectation of 87.8. The Expectations Index eased from 85.1 to 84.3 in the same period. Finally, the Current Assessment Index arrived at 88.5 from the previous reading of 89.4, worse than the market consensus of 89.5.

The weaker-than-expected IFO survey contributed to concerns about Germany's economic downturn, and the figures hint at a modest contraction in GDP growth in the fourth quarter, which is considered a technical recession after two consecutive quarters of negative growth. The worsening economic condition in Germany might cap the upside of the Euro (EUR) and act as a headwind for the EUR/USD pair.

On the other hand, Federal Reserve (Fed) Chair Jerome Powell said during the press conference that inflation has eased from its highs, and this has come without a significant increase in unemployment, and it’s good news. The markets believe the Fed is done with the hiking cycle, and three rate cuts are expected next year.

Nonetheless, the real rate, the gap between the fed funds rate and inflation, remains high, and the Fed is more likely to move if inflation data continues to cooperate. Investors will take more cues from the inflation data on Friday for fresh impetus. The Fed's preferred gauge of inflation, the Core Personal Consumption Expenditures Price Index (PCE), is estimated to remain steady at 0.2% MoM in November. On an annual basis, the Core PCE is projected to grow 3.3% YoY in November.

Looking ahead, market participants will monitor the final reading of the Eurozone Harmonized Index of Consumer Prices (HICP) for November. On the US docket, the Building Permits and Housing Starts for November will be due.

 

EUR/USD

Overview
Today last price 1.0922
Today Daily Change 0.0002
Today Daily Change % 0.02
Today daily open 1.092
 
Trends
Daily SMA20 1.0877
Daily SMA50 1.0746
Daily SMA100 1.0754
Daily SMA200 1.0831
 
Levels
Previous Daily High 1.0931
Previous Daily Low 1.0892
Previous Weekly High 1.1009
Previous Weekly Low 1.0742
Previous Monthly High 1.1017
Previous Monthly Low 1.0517
Daily Fibonacci 38.2% 1.0916
Daily Fibonacci 61.8% 1.0907
Daily Pivot Point S1 1.0897
Daily Pivot Point S2 1.0875
Daily Pivot Point S3 1.0858
Daily Pivot Point R1 1.0936
Daily Pivot Point R2 1.0953
Daily Pivot Point R3 1.0976

 

 

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