FX.co ★ Technical Analysis of EUR/USD for December 29, 2023

Global Forex Insights: Navigating the EUR/USD Dynamics as 2023 Closes

Understanding the Current State of EUR/USD

As we approach the end of 2023, the EUR/USD currency pair offers intriguing insights for traders globally. This article aims to provide an analytical perspective on the EUR/USD movements and implications for traders, keeping in mind the readability and translation ease.

Today's Market Overview: A Quiet Close to the Year

The final trading session of 2023 is anticipated to be relatively calm. Stock markets remain fully operational, with the exception of a shortened session in the UK. Notably, market volumes are typically lower during this holiday season. Key highlights include:

• Index Futures: Moderate increases observed.
• Inflation Data: First glimpse of December's figures.
• Chicago PMI: A focus on the US manufacturing sector.

Macro Calendar Insights: Key Economic Indicators

• 9:00 AM (Switzerland): KOF Leading Indicator, expected at 97 points.
• 9:00 AM (Spain): CPI Inflation Data, with core CPI at an expected 3.2% year-over-year.
• 3:45 PM (USA): Chicago PMI, anticipated at 51 points.

EUR/USD Technical Analysis: Bullish Trends and Potential Corrections

The EUR/USD pair has recently completed a 'Cup and Handle' pattern on the H4 chart, indicating a bullish trend. Key observations include:

• New Highs: A swing high at 1.1140, nearing the target of 1.1310.
• Support Levels: Intraday supports are at 1.1063 and 1.1018.
• Bullish Momentum: Strong positive momentum, though a Bearish Divergence suggests potential corrections.

Pivot Points: Key Levels for Traders

Pivot points are crucial for understanding potential trend reversals:

• Upper Resistance Levels (WR3, WR2, WR1): Ranging from 1.10650 to 1.11323.
• Central Pivot Point: 1.10317.
• Lower Support Levels (WS1, WS2, WS3): Ranging from 1.09311 to 1.10147.

Long-Term Outlook: Trends and Reversals

For a longer-term perspective:

• Fibonacci Relevance: A breakout above the 61% retracement level at 1.0963 could signal a trend reversal favoring the Euro.
• Key Support: Established at 1.0666.

Intraday Indicator Analysis: Diverse Signals

• Technical Indicators: Majority indicate a Sell signal, with a mix of Neutral signals.
• Moving Averages: A split between Buy and Sell signals.

Market Sentiment: Bullish Bias Prevails

• Overall Sentiment: Predominantly bullish (59% bullish vs. 41% bearish).
• Weekly and Recent Trends: Consistently bullish sentiment.

Concluding Insights for Traders

As we conclude 2023, traders should be aware of both bullish and bearish scenarios:

• Bullish Scenario: Continued strength in the EUR/USD pair could see further upward movements, especially if key resistance levels are breached.
• Bearish Scenario: Potential corrections, as indicated by the Bearish Divergence, might offer opportunities for those looking to capitalize on short-term pullbacks.

Useful Links

• More Artcles
• InstaForex Course for Beginners
• Open Trading Account

Important Reminder

The begginers in forex trading need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp market fluctuations due to increased volatility. If you decide to trade during the news release, then always place stop orders to minimize losses.

Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. For successful trading, you need to have a clear trading plan and stay focues and disciplined. Spontaneous trading decision based on the current market situation is an inherently losing strategy for a scalper or daytrader.

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