EUR/USD Rally Pauses Ahead of 1.0500, Maintains Positive Bias
2022.11.16 21:36
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The pair had a volatile session on Tuesday, rallying to fresh five-month highs to settle around its opening level by the end of the New York session.
The weakened across the board following the release of lower-than-expected data, which continued to fuel expectations of a pivot in Federal Reserve monetary policy.
The EUR/USD soared to a high of 1.0481 as the knee-jerk reaction to data but lost ground during the second half of the American session amid reports that stray Russian missiles had crossed Poland’s border and killed at least two people. At the time of writing, the euro-dollar is trading at 1.0330, virtually unchanged on the day.
U.S. Producer Price Index grew at an annualized pace of 8% in October, below expectations of 8.3%, showing further signs that Fed’s policy has started to work out cooling down prices.
Across the pond, ZEW survey data showed improvements in and sentiment indexes.
From a technical perspective, the EUR/USD maintains a bullish outlook, with indicators holding in positive ground on the daily chart while the price briefly surpassed the 200-day SMA, although it failed to consolidate above it.
The 200-day SMA at 1.0429 is the short-term critical resistance to overcome. A break above this level could pave the way to the 1.0500 area. On the other hand, immediate support levels could be found at the weekly lows around 1.0280, followed by the 1.0160 zone and the 100-day SMA, currently around 1.0020.
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