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While Markets Prepare for This Week’s European PMIs and ECB Rate Call, the EUR/USD Pair Continues to Churn

Leon Kramer

ByLeon Kramer

Jan 25, 2024
While Markets Prepare for This Week’s European PMIs and ECB Rate Call, the EUR/USD Pair Continues to Churn

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  • EUR/USD remains frustrated by the 1.0900 level in the short term.
  • Anticipating midweek, there is talk of Europe’s inflation and the upcoming rate decision by the ECB.
  • Survey on Bank Lending by the ECB in the Euro Area Consumer Confidence report for January is set to be released on Tuesday.

As traders prepare for the busy week ahead, the EUR/USD pair is hesitating on Monday. This is because multiple central banks are scheduled to make significant announcements during the previous week.

The Bank Lending Survey conducted by the European Central Bank (ECB) and the preliminary Consumer Confidence report for January are both scheduled to be released on Tuesday. Europe is going to receive an update from both of these projects. Figures for the Purchasing Manager Index (PMI) for the euro area are scheduled to be released on Wednesday, which will provide investors with fresh information.

In addition, the European Central Bank (ECB) is anticipated to make yet another rate call on Thursday, which will undoubtedly attract the attention of market participants.

Following a Week of Losses, the EUR/USD Pair Has Maintained Its Position Close to 1.0900

  • A calm Monday is poised to transition into a busy midweek as all eyes turn to the upcoming ECB rate announcement.
  • Market anticipations of interest rate reductions in 2024 have surged far beyond what policymakers may be capable or inclined to provide.
  • The ECB is firmly committed to maintaining interest rates at their current level until at least the summer unless there are any significant changes in economic data.
  • It is expected that the Consumer Confidence in the euro area will slightly improve in January, moving from -15.0 to -14.3.
  • It is anticipated that the pan-EU HCOB Composite PMI will experience a modest recovery in January, increasing from 47.6 to 48.0.
  • In January, there is an expected increase in Germany’s HCOB Composite PMI from 47.4 to 47.8.
  • Given the ECB’s strong indication to maintain its primary reference rate at 4.5% this Thursday, investors will closely analyze the subsequent Monetary Policy Statement.

As Markets Wait for Midweek Releases, the EUR/USD Currency Pair Continues to Be Stuck in Consolidation

The United States Dollar to Euro exchange rate is currently trading within a technical midrange, with major moving averages serving as critical indicators. Investors are presently weighing the expectations of interest rates and the economic outlook for both the Euro (EUR) and the US Dollar (USD), which has resulted in the market being exceptionally delicately balanced.

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The intraday movement is still confined to the region on the chart that is located around 1.0900, and the 200-hour Simple Moving Average (SMA) is acting as a barrier close to 1.0920.

To this point, in the year 2024, the value of the Euro has decreased by 1.3% in comparison to the value of the United States Dollar. In spite of the recent decline, the EUR/USD pair is steadfastly preserving its position at all of the critical technical levels.

For the daily candlestick analysis, it is observed that the EUR/USD pair is moving aimlessly on the chart paper, fluctuating between the 50-day and 200-day simple moving averages, which are located at 1.0921 and 1.0845, respectively.

Although the pair is continuing to make higher lows, the overall trend is still bullish. However, the upward momentum is beginning to slow down, and there is significant technical resistance at the 1.1000 level.

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Leon Kramer

Leon Kramer

Leon Kramer, a renowned financial author, enlightens Main Forex News readers with his deep understanding of currency markets. His years in global finance, combined with an intuitive grasp of trends, delivers insightful, up-to-the-minute foreign exchange analysis.

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