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EUR/USD tumbles below 1.0550 on upbeat US business confidence

The Euro fell from 1.0600 on Monday and tumbled over 80 pips against the Greenback on Tuesday after Germany revealed that inflation remains steady. Meanwhile, the NFIB Business Optimism Index in the US surged to its highest level since June 2021. The EUR/USD trades at 1.0519. EUR/USD drops amidst high US business confidence, anticipation of ECB rate cuts The National Federation of Independent Business (NFIB) revealed that small businesses grew optimistic about the economy, with the index coming at 101.7, exceeding forecasts of 95.3 and 93.7 in October. Market participants mainly ignored the data, as the EUR/USD slipped below 1.0550 as traders await the European Central Bank (ECB) monetary policy on December 12. In the meantime, EUR/USD traders are eyeing the release of the Consumer Price Index (CPI) in the US ahead of the ECB’s decision. Lagarde and Co. are widely expected to lower borrowing costs; the odds stand at a 100% chance, with the swaps market expecting 28 basis points (bps) of easing. Data-wise, Germany revealed the Harmonized Index of Consumer Prices (HICP), which came steadily at 2.4% YoY in headline figures as expected. The month-over-month figures remained at -0.7%, unchanged and as foreseen by analysts, an indication that inflation continues to edge lower. EUR/USD Price Forecast: Technical outlook The EUR/USD has a neutral downward bias after registering lower lows for the last two days, indicating that bears remain reluctant to give bulls any chance of recovery. Momentum, as measured by the Relative Strength Index (RSI), confirms that thesis, as the RSI edges lower yet is shy of clearing the latest trough. If EUR/USD clears 1.0500, the next support would be the December 2 low of 1.0460, followed by the yearly low of 1.0331. On the other hand, if buyers drive spot prices above 1.0600, this will clear the path for a recovery, but bulls must clear 1.0700 before challenging the 50-day Simple Moving Average (SMA) at 1.0727.

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Publication date:

2024-12-10 15:17:49 (GMT)

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