After closing Monday’s trading down -0.10%, EURUSD started marginally up in the early London session on Tuesday, trading at 1.0772 at 8:05 a.m. GMT. The pair has yet to erase yesterday’s losses and will likely swing marginally on either side as traders wait for definitive cues.
The pair will likely experience volatility as the market awaits the release of the January US core inflation data later on Tuesday. The US dollar DXY index remains stable at 104.20 at the time of writing, a gain of +0.07% over the last 24 hours. This shows that investors are generally bullish toward the US dollar against major currencies.
Meanwhile, the US Treasury yields also favour the positive dollar sentiment. Yields on the 10-year bonds were at 4.189%, while the 5-year bond rates stood at 4.144% at the time of writing. This is likely to cushion the dollar as the market awaits US CPI data.
The USD has been on a week-long consolidation after feeding off the Fed’s interest rate decision and positive jobs data. January’s inflation figures will certainly provide a new dimension to the current setup and could possibly create a new market sentiment.
Analysts expect a core CPI (excluding food and energy) rate of 3.7% in January, down from 3.9% in December. Similarly, the annual CPI is expected to reduce from 3.4% to 2.9%. These figures will shape the Fed’s interest rate decisions as it pushes towards its targeted rate of 2.0%.
EURUSD is pivoting at 1.0785 and the RSI momentum indicator signals a likely downside action. The momentum will likely put the sellers in control, with the first support at 1.0750. Further downward pressure could breach the first support, with the pair possibly touching 1.0740. Alternatively, price action above 1.0785 will signal potential bullishness, with the first upper target at 1.0805. A move above that level will push the resistance level up to 1.0820.
EURUSD 30 minute chart
This post was last modified on Feb 13, 2024, 09:01 GMT 09:01