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  • The EUR/USD begins trading near a one-month high after an early Asian breakout of a two-day uptrend.
  • As Omicron fears Chinese headlines will align with geopolitical events during the downtime, yield and stock futures remain under pressure.
  • A more moderate approach by the ECB has won more awards than a smart move by the Fed.

The EUR/USD technical forecast has turned bullish after the Fed and ECB showed some divergence. The USD retreats across the board. As bids surged to 1.1335 early Friday morning, the EUR/USD pair consolidates losses in the Asian session.

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The underlying currency pair has been supported by cautious bullish moves by the European Central Bank (ECB), helped recently by low US Treasury yields, weighing on the US dollar.

There is a possibility that the recent weakness in US Treasuries, which declined for a second straight day, is due to the excitement in the US Treasury market in search of safe profits. In any case, investors ignore the Fed’s restrictive measures, watching the recent risk aversion fueled by news stories about the South African Covid, China, and US stimulus packages.

As a result of the bottleneck, the European Central Bank (ECB) announced the End of the Pandemic Emergency Procurement Program (PEPP) in March 2022, as well as the expansion of the Securities Purchasing Program (APP) to € 40 billion per month in the second quarter and €30 billion per month in the third quarter of 2022.

The US Federal Reserve (FRS) cut interest rates twice and hinted at three rate hikes in 2022 but could not help lift the US dollar index (DXY), which fell 0.03% on the day to 95.0.96.

During the day to publish, US Treasury yields remain under pressure, while S&P 500 futures are down 0.20%.

Further revision of the Eurozone CPI for November and the German IFO data for EUR/USD traders for December will be a further revision. Christopher J. Waller, a member of the Board of Governors of the Federal Reserve System, offered the following comments.

EUR/USD price technical forecast: Eying at 1.1400

eur/usd forecast

The EUR/USD price remains well bid above 20-period SMA and the 1.1300 mark. On the upside, the major hurdle is 200-period SMA, around 1.1365 ahead of 1.1400. The volume data is giving clues about some potential bullish reversal. The average daily range is 29%, lower than usual. So, expect some volatility in the later session. On the flip side, 1.1300 will be the key support to follow ahead of 1.1260.

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