Get 40% Off
⚠ Earnings Alert! Which stocks are poised to surge?
See the stocks on our ProPicks radar. These strategies gained 19.7% year-to-date.
Unlock full list

EUR/USD Fails To Sustain Gains After U.S. Data Fuels Recession Fears

Published 01/18/2023, 02:35 PM
Updated 07/09/2023, 06:32 AM

The EUR/USD traded little changed by the end of the U.S. session on Wednesday after being rejected by a fresh nine-month high amid renewed recession fears.

At the time of writing, the EUR/USD pair is trading at the 1.0790 area, just a few pips above its opening price, after hitting its highest price since April 2022 at 1.0887 earlier on the day.

On Wednesday, data from the U.S. fueled concerns about an economic slowdown in the world’s biggest economy. Retail sales contracted by 1.1% during December, while industrial production declined by 0.7% in the same period, missing market expectations.

Meanwhile, the Producer Price Index (PPI) rose at an annual pace of 6.2%, easing from 7.3% in November.

In the Eurozone, the Harmonized Index of Consumer Prices (HICP) annual inflation rate was confirmed at 9.2% in December, slowing from 10.1% in November.

Signs of a cooling economy triggered risk aversion and boosted the dollar versus most competitors during the New York session. Main Wall Street indexes were in the red while U.S. bond yields dropped. At the same time, the euro remains under pressure after reports the European Central Bank (ECB) might slow the pace of rate hikes after the February meeting.

EURUSD Daily Chart

From a technical perspective, the EUR/USD pair holds the bullish tone on the daily charts, although the upward momentum is fading. Indicators have turned flat but hold above their midlines, while the price seems to have found decent support at the 1.0765 area.

A loss of the mentioned support could risk a steeper pullback over the following sessions, targeting 1.0720 and the 20-day SMA at around 1.0685.

On the flip side, a break above the 1.0890-1.0900 resistance zone could reignite the bullish momentum, paving the way towards 1.0935 en route to 1.1000.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.