EUR/USD Outlook: Unclear Risk Sentiment Keeps Inactive Above 1.13

• EUR/USD reduces intraday losses during a sluggish Asian session.
• A stronger US data set improved profitability, but concerns about Omicron and incentives encouraged buyers.
• The absence of multiple exchanges can restrict intraday movements; beware of peaks below low volumes.

The EUR/USD price outlook shows rising bids to consolidate intraday losses around 1.1330, falling 0.05% early Friday despite a recent bull run.

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Despite the three-day growth being interrupted the previous day, the major currency pair closed with marginal losses. Even so, the stock is still sluggish as mixed concerns over major risk catalysts add to the market’s inaction on Christmas Eve.

Omicron, a South African variant of covid, shows a lower likelihood of hospitalization in global studies. The FDA’s approval of Merck’s Covid-19 pill the day after Pfizer’s Omicron pill is approved contributes to risk appetite and EUR/USD buying. In addition, US military officials announced earlier this week that they were developing a single covid drug and its variants.

Conversely, the cancellation of French orders on Merck tablets ends with a noticeably smaller effect than expected, and steady increases in Omicron call to challenge market optimism and EUR/USD prices. In addition, the US data, which helped the yield on US government bonds to renew its monthly high of around 1.50%, also weigh on the pair, as the Fed chief indicated that interest rates would rise at the beginning of 2022 in his latest remarks.

Recent events have favored bond bears despite the rise in the Fed’s preferred inflation rate, the core PCE price index, durable goods orders, and Michigan’s consumer sentiment index.

Furthermore, hesitation over US President Joe Biden’s Build Back Better (BBB) plan, China’s aversion to US legislation covering Uighur minority concerns, as well as rising Coronavirus cases in Europe and related restrictions on activity, all contribute to the risk-off mood and cap the EUR/USD buyers.

Due to the Christmas holiday, most US and European markets will be closed on Friday. Therefore, low market liquidity and a light calendar limit immediate EUR/USD movement.

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EUR/USD price technical outlook: Silence before a breakout

The EUR/USD price consolidates in a tight range, creating an ascending triangle pattern. We can expect a breakout of the pattern after the market returns to full swing. The price is well above the 20-period and 5-period SMAs on the 4-hour chart. Meanwhile, the average daily range is 21% which is very low, showing a lack of interest in today’s market.

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