Euro retreated from an intraday high, gaining bearish momentum in the near term EUR EURUSD $EUR $EURUSD
of the US Federal Reserve monetary policy meeting, which revived concerns about skyrocketing inflation. At the same time, upbeat US employment-related figures maintained Wall Street on the winning side, except for the Nasdaq, which fell again on the back of a tech sell-off.
On the data front, Markit published the final versions of the December Services PMIs for the EU, most of which suffered downward revisions. The German index printed at 48.7, slightly better than anticipated, although indicating contraction. The final EU figure came down to 53.1. As for the US, the country published released the December ADP survey on private job creation, posting a whopping 807K, more than doubling the 400K expected. The FOMC Minutes spurred dollar’s demand, as policymakers noted that conditions for a rate hike could be met soon pushing government bond yields higher. The yield on the 10-year Treasury note hit 1.70% a level that draws a line in the sand for the dollar’s strength. As a result, US indexes trimmed early gains and turned red.
On Thursday, Germany will publish Factory Orders, while the EU will unveil the Producer Price Index for the same month. The US will release the November Goods Trade Balance, Factory Orders for the same month, the usual weekly unemployment figures and the official December ISM Services PMI, foreseen at 66.9 down from 69.1 in the previous month.keeps trading within familiar levels, but trimmed early gains and currently hovers around 1.1310.
The 4-hour chart shows that EUR/USD may soon resume its decline, as technical indicators turned firmly lower, with the Momentum retreating from its midline and the RSI currently at around 50. Moving averages remain directionless and within a tight 30 pips range, reflecting the absence of directional strength.