EUR/USD drifted lower on Thursday, influenced by the dollar’s firm positioning. Steady US Treasury yields and expectations for a measured pace of Federal Reserve rate cuts in 2025. This has kept the dollar well-supported, limiting the euro’s ability to gain traction.
Risk sentiment took another hit as China’s industrial profits fell 7.3% year-on-year in November, marking the fourth straight month of decline.
Though the decline slowed compared to October’s drop, the year-to-date figure was a marked range above past declines. This weighed further on currencies abroad, including the euro.
The yen’s strength on rising BOJ rate hike expectations landed a blow to EURJPY, nudging the pair into a decline. That said, the downward move in EURJPY was limited, thanks to subdued performance in USDJPY, which held near 157.50 after pulling back from its 158.09 highs.
See also: Yen Dips, Pressured by BOJ and Fed Policies
The euro’s mild weakness against the yen provided indirect perks to the EURUSD, easing off the pair from experiencing sharper losses.
Picture: EURUSD consolidates near 1.041, facing resistance at 1.043 as momentum weakens, as seen on the VT Markets app.
Looking at the charts, the EURUSD saw minor fluctuations, with prices consolidating after a modest attempt to break above 1.042. The MACD shows bearish histogram bars and a downward crossover of the MACD and signal lines, indicating a weakening upward momentum. The recent high at 1.043 serves as resistance, while the support near 1.040 holds for now.
Recent European Central Bank (ECB) comments suggesting continued vigilance on inflation, alongside subdued US data, have kept EURUSD in a narrow range. With holiday-thinned trading, prices remain reactive to broader sentiment shifts.
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