It has been a rally-and-reverse day for the U.S. dollar so far, as market jitters extended their stay.
This has kept EUR/USD in consolidation mode, but it looks like the pair might be picking a direction soon.
Before moving on, ICYMI, I’ve listed the potential economic catalysts that you need to watch out for this week. Check them out before you place your first trades today!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
Over the weekend, Saudi Aramco announced that it would cut oil prices to all regions in a move to possibly counteract downside supply pressures
Chinese shadow-banking firm Zhongzhi announced bankruptcy due to property sector collapse, Chinese shares off to shaky start for the week
German factory orders saw a meager 0.3% m/m uptick vs. estimated 1.1% increase in Nov, still chalking up a rebound over the earlier 3.7% slump
German trade surplus widened from 17.7 billion EUR to 20.4 billion EUR vs. estimated 17.9 billion EUR figure
Price Action News
Overlay of USD vs. Major Currencies Chart by TradingView
Most major pairs were off to a lazy start for the week, although the dollar managed to squeeze out some gains thanks to lingering risk-off vibes.
Reports that Saudi Aramco announced oil price cuts to the region in an effort to counteract supply pressures, plus the collapse of a Chinese shadow-banking wealth managing firm contributed to risk aversion.
However, the dollar’s safe-haven gains were quickly returned, as traders are likely holding out for the release of top-tier inflation data, including the U.S. CPI and Chinese CPI, later in the week.
Upcoming Potential Catalysts on the Economic Calendar:
U.K.’s final manufacturing PMI at 9:30 am GMT
Canada’s manufacturing PMI at 2:30 pm GMT
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! ️
EUR/USD: 15-min
EUR/USD 15-min Forex Chart by TV
This currency pair has been pacing back and forth since the start of the year, finding support around the 1.09030 area and resistance near 1.0975.
One possible reason is that traders are still weighing the odds of Fed easing in the coming months, and the latest commentary from the central bank showed mixed signals.While the dot plot projections suggested three rate cuts this year, the minutes of the meeting suggested that most policymakers are inclined to keep rates higher for longer.
EUR/USD is now hanging out at the middle of its short-term range at the pivot point level (1.0940), still deciding where to head next.
A break below this support region could pave the way for a move to the range support just slightly above S1 (1.0880), and further downside pressure past this could spur a test of S2 (1.0820).
On the other hand, a bounce off current levels could take EUR/USD to the range resistance or the highs near R1 (1.1000) which lines up with a major psychological mark.
