EUR/USD picks up extra pace and leaves behind 1.0800
EUR/USD sees its upside accelerated to levels last seen back in late April 2022 north of 1.0800 the figure on Thursday. EUR/USD advances for the fifth consecutive session to trade in levels past the 1.0800 barriers on the back of the increased selling pressure in the dollar, particularly exacerbated following the release of US inflation figures during December. On the latter, the headline CPI rose at an annualized 6.5% in December and 5.7% YoY when it comes to the Core CPI, which excludes food and energy costs. Headline consumer prices, therefore, retreat for the sixth consecutive month so far and add to the rising perception of the Fed’s pivot in the not-so-distant future.
Additional releases in the US calendar saw Initial Jobless Claims rise 205K in the week of January 7, surpassing consensus. In the wake of the publication of the US CPI, the probability of a 25 bps rate hike at the next Fed event climbed to 82% according to CME Group’s FedWatch Tool. EUR/USD finally breaks above the key 1.0800 barriers to print new 9-month peaks on Thursday. Price action around the European currency continues to closely follow dollar dynamics, as well as the impact of the energy crisis on the region and the Fed-ECB divergence. Back to the euro area, the increasing speculation of a potential recession in the bloc emerges as an important domestic headwind facing the euro in the short-term horizon. So far, the pair is advancing 0.43% at 1.0803 and faces the next-up barrier at 1.0815 (monthly high January 12) followed by 1.0900 (round level) and finally 1.0936 (weekly high April 21, 2022). On the other hand, the breach of 1.0481 (monthly low January 6) would target 1.0443 (weekly low December 7) en route to 1.0424 (55-day SMA).