Solid News

EURUSD Market Update

1/16/2023 12:18 PM

Against the significant decrease in inflation in the leading EU economies, the EUR/USD pair is moving within a corrective trend at 1.0856.

Friday's consumer price data showed a contraction in France to 5.9% from 6.2% earlier and 5.7% from 6.8% in Spain, indicating the effectiveness of measures taken by the European Central Bank (ECB). Also, in November, the region's industrial production added 1.0% after falling by 1.9% earlier, which contributed to the correction of the annual value to 2.0%, although analysts had expected a figure of 0.5%. The output of capital goods, such as production machines, increased most of all, which may indicate the prospects for economic recovery and interest from investors.

The US dollar is in the red zone for the fourth week, having renewed the low of 101.600 in the USD Index. Despite stable data on the labor market, leading economists do not believe that the national economy will avoid recession this year: according to a survey conducted by The Wall Street Journal, 61.0% of respondents believe that the recession will come in the summer. Analysts believe that in the first quarter of the year, the country's gross domestic product (GDP) will be 0.1% YoY, and in the next period, the fall could reach 0.4%, and the figure will remain in the negative zone until the end of 2023.

On the daily chart, the trading instrument continues its corrective movement, heading toward the resistance line of the rising corridor.

Technical indicators keep a stable buy signal: fast EMAs on the Alligator indicator are moving away from the signal line, and the AO oscillator histogram forms upward bars, rising in the buying zone.

Resistance levels: 1.0920, 1.1160. | Support levels: 1.0780, 1.0586.

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