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Euro is Consolidating Near June Highs

1/10/2023 10:41 AM

The European currency shows flat dynamics, consolidating near 1.0730 and local highs from June 9. The day before, the instrument showed active growth, continuing the development of Friday's impetus, which was formed against the backdrop of the publication of data on the US labor market. Investors are still counting on the fact that the US Federal Reserve will slow down the pace of interest rate hikes, and in a few months will take a wait-and-see attitude. In addition, optimistic traders expect a gradual recovery in the global economy as inflation stabilizes.

Macroeconomic statistics from Europe published yesterday did not have a noticeable impact on the instrument's dynamics. The volume of Industrial Production in Germany in November lost 0.4% in annual terms after the zero dynamics of the previous month, while analysts expected an increase of 1.3%, and in monthly terms, the indicator added 0.2% after falling by 0.4% in the previous period, while forecasts suggested a correction of only 0.1%. Sentix Investor Confidence in the euro area in January corrected from -21.0 points to -17.5 points, which was worse than the expected -11.1 points. The Unemployment Rate in the eurozone in November remained at the same level of 6.5%. The European Central Bank (ECB) projects that nominal wages in the region will rise significantly over the coming quarters, but the real figure will decline due to high inflation.

Bollinger Bands in D1 chart show moderate growth. The price range is expanding but it fails to conform to the surge of "bullish" activity at the moment. MACD indicator is growing, while preserving a rather stable buy signal (located above the signal line). Stochastic keeps its upward direction but is rapidly approaching its highs, which reflects the risks of overbought euro in the ultra-short term.

Resistance levels: 1.0759, 1.0800, 1.0850, 1.0900. | Support levels: 1.0700, 1.0657, 1.0600, 1.0550.

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