VOT Research Report
Market Analytics and Considerations
Detailed Analysis
After China’s covid quarantine regulations were loosened, the EURUSD is trading above 1.02. Société Générale economists anticipate that the pair will continue to rise toward the 1.0360/1.0450 area.
The EURUSD bottom is likely behind us.
“The easing of covid quarantine regulations in China aids in lifting the economic doldrums around the world and it will quicken supply chain restoration. From a macroeconomic standpoint for Europe, the potential reopening of the Chinese economy is the second prerequisite that warrants a more optimistic prognosis for international commerce as well as the currency, following the Fed.
Despite the oil crisis and the negative outlook for the Ukraine conflict, inflation, and economy, the EURUSD bottom is likely behind and, and medium-term targets may be achieved.
“The pair is anticipated to gradually move upward toward estimates of 1.0285 and the 200-DMA-corresponding August high of 1.0360/1.0450. This can be a zone of resistance.
“It’s essential to defend 1.0000/0.9930 to continue moving forward.
EURUSD boosted by dollar weakness
EURUSD advances for the second session in a row and flirts with the 1.0270 region, an area last traded back in mid-August, at the end of the week.
The pair saw its upside abruptly reinvigorated after lower-than-estimated US CPI results in October lend support to the idea that inflation pressures could be cooling down and that the Fed could slow the pace of its current hiking cycle.
The daily uptick in the pair so far comes in tandem with a modest upside in German 10-year bund yields, which manage to set aside three consecutive daily pullbacks.
In the domestic calendar, final inflation figures in Germany showed the CPI rise 10.4% YoY and 0.9% vs. the previous month.
According to the domestic calendar, Germany’s CPI increased by 10.4% YoY and 0.9% from the prior month.
Only the preliminary Michigan Consumer Sentiment for the month of November will be released across the Atlantic.
What to watch for in the EURUSD area The post-US CPI surge is still going strong, and by the end of the week, prices are trading nearer to the 1.0300 level.
Price movement surrounding the euro is anticipated to closely track dollar trends, geopolitical tensions, and the Fed-ECB split in the interim. The primary barrier to a long-term rebound in the pair is now the Fed’s recent decision to raise rates and the possibility of a tighter stance going forward.
In the long run, the weak feeling around the euro is further exacerbated by the growing suspicion of a potential regional recession, which appears to be supported by declining sentiment indicators as well as an impending downturn in certain fundamentals.
Levels to monitor in the EURUSD
The duo is currently up 0.39 percent at 1.0247, and the next resistance level is at 1.0273 (the monthly high from November 11), followed by 1.0368 (the monthly high from August 12), and finally 1.0437. (200-day SMA). On the other side, a break of the 100-day SMA level at 1.0029 would aim for the 55-day SMA level at 0.9898 and move the price to 0.9730. monthly Nov 3 low area.
