- EUR/USD trades slightly lower in quiet session, with focus on upcoming FOMC minutes and EU data.
- Bundesbank reports no imminent recovery for Germany, predicting a technical recession in early 2024.
- Global equities’ strength limits USD gains, with key economic releases ahead to influence market direction.
The Euro lost ground against the US Dollar amid thin trading in the observance of President’s Day in the United States (US). At the time of writing, the EUR/USD pair fluctuates around 1.0770s, down by 0.07%, after hitting a daily high of 1.0789.
During the European session, the Bundesbank noted that Germany’s economy is likely in a recession, in the Buba Monthly Economic Report. The bank noted there’s “still no recovery for the German economy,” adding that. “Output could decline again slightly in the first quarter of 2024. With the second consecutive decline in economic output, the German economy would be in a technical recession.”
Investors’ upbeat tone, as witnessed by European and Asian equities trading with gains capped the Greenback’s gains.
EUR/USD traders would be eyeing the release of the Federal Open Market Committee (FOMC) minutes, which would likely not move the needle after Federal Reserve Chair Jerome Powell and his colleagues delivered a “hawkish” hold. Besides this, US S&P Global PMIs, along with jobs data, could trigger volatility towards the end of the week.
Across the pond, the Eurozone (EU) economic docket will feature the European Central Bank (ECB) latest minutes and the EU’s wages indicator.
The EUR/USD daily chart suggests the pair remains bearishly biased, trading below the 50, 200, and 100-day moving averages (DMAs). That, along with Relative Strength Index (RSI) studies aiming lower, could pave the way for challenging the February 14 low of 1.0694. Further downside is seen at November’s 10 cycle low at 1.0656, before testing 1.0600. On the upside, buyers must reclaim the 100-DMA at 1.0799, to remain hopeful of testing the 200-DMA at 1.0826.