April 25, 2024

EUR/USD: Bulls to Eye $1.0680 on German’s Business Sentiment Figures

It’s a calm Monday for the EUR-USD. Meanwhile, the German economy will remain in the limelight, with December’s business sentiment numbers in focus. Following December’s prelim private sector PMI figures, the markets will check for potential business confidence pickup.

The Composite PMI survey of December showed private sector sentiment improved, turning optimistic towards the year’s end. As a result, analysts predict an uptick in the German Ifo Climate Index to 87.4 from 86.3, backed by a more pickup in GBEI (German Business Expectations Index).

Also, they forecast a surge to 82 from 80 while predicting an increase to 93.5 from 93 in the CAI (Current Assessment Index). Nevertheless, the prevailing inflation will see ECB, Q3 labor cost numbers, and Eurozone’s wage growth attracting interest.

The European Central Bank upwardly reviewed inflation on Thursday – to 6.3% from 5.5%. Labor costs and wage growth pickup will support ECB’s stance. After Thursday’s financial policy projections and decision, the markets should consider the European Central Bank chatter.

EUR-USD Price Action

The EUR hovered at $1.06012 during this publication, following a 0.16% surge. Earlier mixed moves witnessed the UER-USD dipping to a $1.05821 low before soaring to $1.06041. The pair should move through the pivot at $1.0611 to open the gates to the initial massive obstacle at $1.0637. Such a move would mean surpassing the $1.06631 Friday high.

Better-than-anticipated economic signals would welcome an optimistic session. However, in the scenario of a stretched upside, EURUSD bulls will likely hit the second crucial obstacle at $1.0689. Meantime, the third massive resistance stands at $1.0768.

Failure to overpower the pivot mark would see the pair plunging to the first massive support barrier at $1.0558. Excluding a risk-off-driven slump, EURUSD should avoid the $1.05 vicinity. The second reliable support floor at around $1,0532 should prevent more declines. Meanwhile, EUR-USD’s third support hovers at $1.0453.

The four-hour chart and Exponential Moving Averages presented a bullish sign. While publishing this content, the EUR-USD exceeded $1.05785 (the 50-day Exponential Moving Average). Meanwhile, the 50-d EMA drifted from the 100-d Exponential Moving Average, with the 100-d EMA moving from the 200-d EMA, demonstrating bullish signs.

Sustenance beyond $1.05783 (50-d Exponential Moving Average) would support breakouts from the $1.0637 initial resistance to eye the $1.0689 obstacle. Nevertheless, a dip beneath $1.05783 and $1.0558 would see the pair hitting $1.0532. The 200-d Exponential Moving Average stands at $1.03686.

The United States Session

It will be a calm day for the dollar, with markets concentrating on December house price data. Considering the elevated mortgage rates and resurfacing recession worries, declines in the Housing Market Index (NAHB) would weigh on risk assets.

Slumped house prices would pressure the secure to hurt consumer confidence. Such developments would catalyze surged recession fears. Investors will have to track FOMC member conversations because of Fed’s hawkishness last week. Last week’s FOMC rate prediction and United States indicators welcomed uncertainty.

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