EUR/USD Struggles at Resistance Ahead of Fed and ECB Decisions

www.investing.com/analysis/eurusd-struggles-at-resistance-ahead-of-fed-and-ecb-decisions-200633284

By Alex Boltyan | Dec 08, 2022 08:52AM ET

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EUR/USD

-1.05%

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The EUR/USD pair continues to gravitate around the 1.0500 area on Thursday as investors take the back seat ahead of the Federal Reserve and the European Central Bank policy decisions next week.

At the time of writing, the EUR/USD pair is trading at 1.0520, up 0.1% on the day, extending its recovery from weekly lows around 1.0440.

Growth data from the Eurozone showed resilience in the region on Wednesday. Still, the euro failed to capitalize on it amid renewed energy concerns as the Russian President said the possibility of a nuclear war was increasing.

At the same time, the market focus remains on next week's Fed and ECB decisions. The Federal Reserve will announce its policy rate on Wednesday, and market participants continue to lean toward a less aggressive hike of 50 basis points.

The ECB will do the same on Thursday, and expectations also point to a 50 bps increase in its main rates, although Lagarde & Co. could "surprise" with a 75 bps move.

EUR/USD daily chart.

From a technical perspective, the EUR/USD short-term bias remains bullish as the price stands above its main moving averages on the daily chart, although indicators show dwindling momentum. Despite this week's correction, the RSI stands near overbought territory, while the MACD sits barely above its mid-line.

The EUR/USD pair needs to reclaim the 1.0600 area – where a 1 ½-year-old descending trend line stands – to pick up the pace and move towards 1.0700. On the flip side, short-term supports line up at 1.0400, 20-day SMA, and 1.0350, 200-day SMA.

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Central Banks

Interest Rates

Next Meeting

FED

4.75%

Mar 22, 2023

ECB

3.00%

Mar 16, 2023

BOE

4.00%

Mar 23, 2023

SNB

1.00%

Mar 23, 2023

RBA

3.10%

Feb 07, 2023

BOC

4.50%

Mar 08, 2023

RBNZ

4.25%

Feb 22, 2023

BOJ

-0.10%

Mar 10, 2023

CBR

7.50%

Feb 10, 2023

RBI

6.25%

Feb 08, 2023

PBOC

3.65%

BCB

13.75%

Mar 22, 2023

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EUR/USD Struggles at Resistance Ahead of Fed and ECB Decisions

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