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EURUSD Technical Analysis – December-19-2023

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In today’s comprehensive EURUSD technical analysis, we will first scrutinize the price action of the currency pair, and then meticulously delve into the fundamental analysis pertaining to this trading instrument.

EURUSD Technical Analysis

FxNews – The currency pair is currently challenging the 23.6% Fibonacci resistance level, following a predicted rebound from the 38.2% level. This upward movement aligns with our expectations, considering the ongoing bullish trend and the fundamental factors at play. Should the bulls manage to secure a close above the 23.6% mark, we anticipate the bullish momentum to carry the pair towards 1.1008, matching the recent highs.

Conversely, if the pair stabilizes below the 38.2% Fibonacci level, it would cast doubt on the current bullish technical analysis. In such a case, we could see the pair’s decline extending towards the Fibonacci cloud, signaling a potential shift in the market trend.

EURUSD Technical Analysis - December-19-2023

EURUSD Technical Analysis – 4H Chart

Eurozone Rate Cut Expectations Affect Euro

Reuters – The euro recently traded below the $1.1 mark, driven by investor expectations of a potential decrease in Eurozone interest rates. On Tuesday, Francois Villeroy de Galhau from France hinted at a possible rate decrease next year, with the goal of bringing inflation back down to 2% by 2025 at the latest. This statement suggests a cautious approach to monetary policy in the Eurozone. In contrast, Yannis Stournaras of Greece took a firmer stance. He emphasized that inflation should be controlled to below 3% by the middle of next year before any reduction in borrowing costs is considered. This difference in opinions highlights the varying perspectives among European Central Bank policymakers regarding the appropriate timing and pace of changing interest rates.

Despite a drop in inflation to 2.4% in November, economists are still concerned about the potential for inflation to rise later in the year. This ongoing concern about inflation dynamics is a key factor influencing investor sentiment and the euro’s value in the currency markets.

  • 19 December 2023
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