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EUR/USD Struggles and GBP/USD Rebounds Amid Central Bank Focus. - 17/12/2024
KEY HIGHLIGHTS
- EUR/USD struggles to gain momentum, focuses on Fed decision.
- GBP/USD rebounds as traders await central bank outcomes.
- NZD/USD steady near 0.5800 amid cautious market sentiment.
- USD/CAD holds near multi-year highs, supported by political uncertainty.
INTRODUCTION
The currency markets are in focus as major currency pairs react to central bank policies, economic data, and geopolitical developments. Traders are particularly eyeing the Federal Reserve’s upcoming rate decision, which has broader implications for the U.S. Dollar (USD), while developments in Europe, the UK, New Zealand, and Canada add further volatility to the forex market. This article delves into key market movements, technical trends, and trade setups for EUR/USD, GBP/USD, NZD/USD, and USD/CAD.Markets in Focus: EUR/USD Struggles Below 1.0500
EUR/USD continues to face challenges in gaining momentum, struggling to stay above the critical 1.0500 level. On Monday, the pair showed modest gains but lacked conviction, edging within a narrow range. While European December PMI figures exceeded expectations, the Services PMI remained in contraction, reflecting ongoing economic concerns in Europe.The market’s primary focus remains on the Federal Reserve’s interest rate decision scheduled for Wednesday. According to the CME FedWatch Tool, markets have priced in a 99.1% probability of a 25-basis-point rate cut. Traders are keenly awaiting the Fed’s updated Summary of Economic Projections (SEP) and its dot plot for further clues on interest rate directions in 2025.
In contrast, U.S. economic data painted a mixed picture. Services PMI surged to multi-year highs, while Manufacturing PMI remained below 50, signaling continued contraction. Retail Sales data, due later today, may have a limited impact as the Fed meeting takes precedence.
EUR/USD Technical Overview:
- Moving Averages (Exponential):
- MA 10: 1.0514 – Negative Crossover – Bearish
- MA 20: 1.0543 – Negative Crossover – Bearish
- MA 50: 1.0659 – Negative Crossover – Bearish
- RSI: 42.47 – Neutral Zone
- Stochastic Oscillator: 33.26 – Sell Zone
- Resistance and Support Levels:
- R1: 1.0846 | R2: 1.0988
- S1: 1.0384 | S2: 1.0242
Market Direction: Sell
Trade Suggestion: Limit Sell: 1.0532 | Take Profit: 1.0474 | Stop Loss: 1.0575
