When looking at technicalities it would seem the upside in EURUSD is capped as the cross has risen close to the 200 day MA, which is a solid resistance level. Moreover, the 14 day Relative Strength Index is close to 70, a level suggesting the USD is oversold against the EUR. From a fundamental perspective, 2 year interest rate differentials between EUR and USD argues for lower EURUSD, while investors are positioned for a higher EURUSD.
The deciding factor for EURUSD will be the data out of the US in the next three weeks: JOLTS job vacancies (30/11), ISM indexes (1/12 and 5/12), nonfarm payrolls (2/12) and US CPI figures (1312). Other key factor will be the speech from Chairman Powell say on the 30th of November and the Fed meeting on the 14th of December.
Longer out, the path for the USD will also be influenced by developments in the far East. Considering the latest market rally began with the prospect of China lifting its zero covid policy we need to discuss what we can expect from China in the coming year. - Nordea
Коментарі