EUR/USD Fundamental Analysis
On Friday, the EUR/USD forex pair extended its losses for the second consecutive session after the US dollar gained some strength. The US Dollar Index, which measures the strength of the USD against the basket of six major currencies, was up with +0.10% gains. The main driver was the positive US economic docket for the day.
The Core PCE Price Index for December came in line with the market anticipations of 0.3%. The market expectations for a slowdown rate hike from Federal Reserve in the upcoming meeting surged after this report. Furthermore, the Pending Home Sales in December increased for the first time since May 2022 to 2.5% against the forecasted -1.0%. This accelerated the rising prices of DXY and added selling pressure on EUR/USD.
On the other hand, the shared currency Euro also experienced selling pressure after negative M3 Money Supply and Private Loan data from December. However, the 0.2% growth in Q4 GDP of Spain caped further losses in EUR/USD.
EUR/USD Technical Analysis
The H4 chart of EUR/USD shows that there might be a possible reversal in prices coming ahead. The big price correction in the early days of January is likely to be repeated in the market. EUR/USD has been continuously rising since late September 2022. In between, the prices have seen some corrections to make the upward trend healthier and keep the volatility alive. These corrections can be seen in October, November, and early January. Now, as the month-end is coming, there might be a possible correction coming ahead.
However, it can only be confirmed if the H4 candle closes below the blue upward-sloping line. The price level is the same, where the 50-Day Simple Moving Average (SMA) in pink is resting at 1.08571. Any H4 candle closing below this level could confirm the invalidation level.
EUR/USD Daily Technical Levels
Pivot Point: 1.0889