After having rebounded strongly at the end of last week, and after having marked a summit at from almost two months to 1.0757 on Monday, the EUR/USD corrects, as the currency pair has retreated. until’à a hollow at; 1.0664 yesterday, and remaining below the key threshold; of 1.07 this Wednesday morning.
It is indeed necessary to remember that the Dollar had been affected last week by the Fed meeting and by the NFP report on US job creation, both of which argued for the end of the FOMC rate hike.
Indeed, the Investing.com Fed rate barometer today indicates a probability The Fed is expected to raise rates by only 10% at its next meeting on December 13, compared to around 30% a week ago.
However, since the start of the week, several indicators have weighed on the Euro, leading to a correction of recent gains. We will notably cite the European manufacturing PMI, which just confirmed Monday's consensus, or the sharp fall in German industrial production on Tuesday.
Furthermore, several members of the Fed spoke yesterday, and left to float the idea that the cycle of rate increases is not over. In this context, the intervention of central bank boss Jerome Powell scheduled for this Wednesday will be closely monitored, as will its impact on rate expectations.
What is the technical context on the EUR/USD?
From a graphical point of view, it is important to note that the correction of the EUR/USD since the start of the week results from a rejection from the upper limit of an ascending channel visible for around 6 weeks.
As long as the Euro Dollar correction remains within this channel, the bullish bias will not be called into question. On the other hand, this implies that the currency pair could accentuate its decline until the end of the year. 1.06 approximately before finding support on the lower terminal of the channel.
As far as the key thresholds are concerned, to monitor, the resistances are located at 1.07 and 1.0750-60, before a much more significant barrier to 1.08, since the 100 and 200 day MAs, two closely monitored indicators, are currently on this threshold. On the downside, the first potential support is an old resistance which is located around 1.0640, before 1.06.
The EUR/USD hesitates but the trend remains bullish, Powell in the center of attention
