Euro-dollar rejects $1.05 for now

The euro has been weak against the dollar in recent months due to diverging monetary policy but also a worse economic outlook in the eurozone. Recent job data and GDP from the eurozone have been mostly negative while the American economy looks strong overall. Threatening tariffs on imports to the USA have affected sentiment, but there’s been no confirmation yet as to how much they might be or which European products will be affected.

The 50 SMA from Bands has been an important technical reference for the last couple of weeks. The price is currently testing a move below it. Although the move above $1.05 amid overbought hasn’t been successful, it’d be possible to see a retest of that area depending on the results of the NFP on 7 February.

To the downside, parity still seems like an excessively aggressive target. $1.02 might be more realistic in the next few weeks; this seems to be an important area based on the fairly strong reaction on 13 January.

This is my personal opinion which does not represent the opinion of Exness. This is not a recommendation to trade.