- Increased geopolitical tensions in the Middle East dampened risk appetite.
- Recent data points to a moderate increase in prices in the US for December.
- The US Federal Reserve is likely to keep rates unchanged on Tuesday.
Today’s EUR/USD forecast revealed a subtle bearish bias. The dollar remained steady as investors closely weighed key US economic data ahead of the Fed’s eagerly awaited policy meeting. At the same time, the undercurrent of heightened geopolitical tensions in the Middle East reduced the sense of risk, further supporting the dollar.
–Are you interested in learning more about ETF brokers? Check out our detailed guide-
Recent data points to a moderate rise in US prices in December, keeping annual inflation below 3% for the third month in a row. As a result, it reinforced the prevailing expectation of a potential rate cut later in the year. Meanwhile, this week, investors will focus on the Fed’s two-day policy meeting starting on Tuesday. The central bank will most likely keep rates unchanged. Therefore, the focus will be on Fed Chairman Jerome Powell’s comments.
Elsewhere, traders bet heavily on Thursday that the ECB will start cutting rates in April. They believe that policymakers are more comfortable with the outlook for inflation. In particular, the ECB failed to mention that domestic price pressures remain elevated. As a result of this omission, markets believe that the ECB is increasingly confident that inflation is slowing.
Meanwhile, a survey on Friday revealed that German consumer sentiment is set to weaken in February, as households remain concerned about economic uncertainty. This failure destroyed all hopes of recovery of Europe’s largest economy after a mild recovery at the beginning of the year.
EUR/USD key events today
It is likely to be a slow day for the couple as there are no high impact events scheduled for today.
EUR/USD Technical Forecast: RSI Bullish Divergence
On the technical side, the bias for EUR/USD is bearish. The price has made lower lows and highs and is trading below the 30-SMA. At the same time, the RSI is below 50, indicating strong bearish momentum.
–Are you interested in learning more about Canadian forex brokers? Check out our detailed guide-
Furthermore, the price is currently trading with the nearest resistance at 1.0900 and the nearest support at 1.0800. However, the current bearish move might be coming to an end as the RSI has made a bullish divergence. Therefore, the trend could be reversed if the bulls break above the 30-SMA and resistance at 1.0900.
Do you want to trade Forex now? Invest in eToro!
68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing money
