FxWirePro- EURUSD Daily Outlook

EURUSD pared some of its gains made on Friday and lost nearly 80 pips on the US dollar's minor pullback.  Economic recession fears and geopolitical tension between Russia and the EU support the US dollar index at lower levels. The sell-off in Euro might be limited as markets expect more rate hikes in Europe compared to the US. It hits an intraday high of 1.05414 and is currently trading around 1.05389.

US PPI rose to 0.30% in Nov, above the estimate of 0.20%. The headline annual inflation came at 7.4% vs the 7.2% expected.

According to the CME Fed watch tool, the probability of a 50 bpbs rate hike in Dec declined to 74.70% from 78.20% a week ago.

 The US 10-year yield gained more than 5% from yesterday's low of 3.404%. The US 10 and 2-year spread widened to -78.80 basis points from -67 bpbs.

Technical:

On the higher side, near-term resistance is around 1.0550 and any convincing breach above will take the pair to the next level of 1.0600/1.0660.

The pair's immediate support is at 1.0435, breaking below targets of 1.0370/1.02900.

Indicator (4-hour chart)

Directional movement index – Neutral

CCI(50)- Bullish

It is good to buy on dips around 1.0490 with SL around 1.0430 for a TP of 1.0660.