The pair slumped at the start of the year, mostly due to aggressive expectations around the Fed's rate hike path and the rise in US yields, as the monetary policy differential is unfavorable.
This has created increased risk for a breach of the ascending trend-line form November's 2021 low (at mid-1.1200s), but that low (1.1185) will require more effort.
Today however, the common currency rebounds and reclaims the EMA100 (black line), continuing this pull and push around it that has characterized it for a month now.
This can give it the opportunity to push again for the 38.2% Fibonacci of the "October High/November Low" drop (1.1380), but a strong catalyst will be needed for a bigger recovery towards and beyond 1.1330-40.
As such, the technical outlook has not changed much form the previous analysis, as markets await key data, mostly from the US. Minutes from the Fed's December monetary policy meeting are due later today, whereas on Friday, we expect the US Jobs report and Eurozone's preliminary CPI Inflation.
Past Performance: Past Performance is not an indicator of future results.
Senior Market Specialist
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.
With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.