EUR/USD jumps back to multi-month highs near 1.1250.

EUR/USD is rebounding to refresh multi-month highs near 1.1250, snapping its pullback in the European session. The pair is regaining upside traction, as the US Dollar sees a fresh round of selling despite a cautious market mood, awaiting the consumer sentiment data.

Technical Overview

The Relative Strength Index on the four-hour chart stays near 80, highlighting overbought conditions for EUR/USD in the near term. In case the pair stages a downward correction, 1.1200 (former resistance, psychological level) aligns as initial support before 1.1160 (former resistance, static level) and 1.1120 (upper-limit of the broken ascending regression channel).On the upside, interim resistance seems to have formed at 1.1240 ahead of 1.1270 (static level from March 2022) and 1.1300 (psychological level). EUR/USD extended its rally and reached its highest level since March 2022 at 1.1244 in the Asian session on Friday before retreating modestly. The pair holds comfortably above 1.1200 in the European morning.

Following Wednesday’s softer-than-forecast Consumer Price Index (CPI) inflation data, the US Dollar (USD) selloff picked up steam on Thursday after the US Bureau of Labor Statistics reported that the Producer Price Index (PPI) rose only 0.1% on a yearly basis in June.

Risk flows continued to dominate the markets in the American session and the USD suffered heavy losses against its major rivals.Although several Federal Reserve (Fed) policymakers voiced their willingness to continue to tighten the policy despite encouraging inflation developments, EUR/USD preserved its bullish momentum.

The Fed’s blackout period will start on Saturday and Fed officials could continue to push back against the market expectation of the US central bank reaching its terminal rate with a hike in July. At this point, however, it will take more than hawkish comments to convince markets that the Fed is still on track to raise the policy rate twice more this year.

It’s also worth mentioning that EUR/USD is already up more than 200 pips this week. Investors could look to book their profits ahead of the weekend and limit the pair’s upside. Nevertheless, a steady recovery in the US Dollar could be hard to come by until market participants see strong labor market and inflation data to reassess the Fed’s rate outlook.

EUR/USD: Focus returns to inflation PREMIUM.EUR/USD: Focus returns to inflation.The EUR/USD pair saw little action for a second consecutive week, settling around the 1.0940 mark. The US Dollar benefited from a souring market mood, while the absence of relevant European data kept the Euro in check.

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EUR/USD jumps back to multi-month highs near 1.1250

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EURUSD FORECAST 2023

In the EURUSD 2023 Forecast, our analyst, Valeria Bednarik, expects the EUR/USD long-term corrective advance will likely continue in the first quarter of 2023. By the end of the year 2022, the average outlook for the pair was 1.0538. Read more details about the forecast.From Jan 2022 to Dec 2022, the maximum level for the EURUSD (Euro US Dollar) was 1.1455 (on 06/02/22), and the minimum, 0.9589 (on 27/09/22).

The GBP/USD (or Pound Dollar) currency pair belongs to the group of ‘Majors’, a way to mention the most important pairs worldwide. This group also includes the following currency pairs: EUR/USD, USD/JPY, AUD/USD, USD/CHF, NZD/USD and USD/CAD. The pair is also called ‘The Cable’, reffering to the first Transatlantic cable that was crossing the Atlantic Ocean in order to connect Great Britain with the United States of America. This term was originated in the mid-19th century and it makes GBP/USD one of the oldest currency pairs in the world.

The popularity of the Pound Dollar is due to the fact that represents two strong economies: British and American (from United States of America). The Cable is a widely observed and traded currency pair where the Pound is the base currency and the US Dollar is the counter currency. After the result of the Brexit referendum, where the majority of the British voted to abandon the European Union, GBP/USD has been suffering some turbulence in the Forex market as a consequence of the associated risks of leaving the single market.

USD/JPY

The USD/JPY (or US Dollar Japanese Yen) currency pair is one of the ‘Majors’, the most important pairs in the world. Japanese Yen has a low interest rate, normally used in carry trades, that’s why is one of the most trades currencies worldwide. In the USD/JPY the US Dollar is the base currency and the Japanese Yen is the counter currency. The pair represents American (from United States of America) and Japanese economies.

Trading the USD/JPY currency pair is also known as trading the “ninja” or the “gopher”, although this last name is more frequently used when reffered to the GBP/JPY currency pair. The US Dollar Japanese Yen usually has a positive correlation with the following two pairs: USD/CHF and USD/CAD. The nature of this correlation is dued to the fact that both currency pairs also use the US Dollar as the base currency, such as USD/JPY. The value of the pair tends to be affected when the two main central banks of each country, the Bank of Japan (BoJ) and the Federal Reserve Bank (Fed), face serious interest rate differential.