top of page
  • Writer's pictureuseyourbrainforex

Forex market overview: EUR/USD analysis, January 10, 2024

EUR/USD forex market analysis

The euro exchange rate maintained its position above the 1.09 level during the Wednesday morning session. Notably, for the past six sessions, the EUR/USD pair has consistently responded positively to any attempts to push it below the 1.0902. It is pertinent to mention that the strength of the dollar has hitherto been supported by the upward movement in the yields of U.S. bonds. However, there is a possibility that this source of momentum for the dollar exchange rate might be gradually diminishing.

Both the euro and the dollar exchange rates experienced minimal fluctuations throughout the day. The sluggish pace observed during Wednesday's trading session can be attributed to the anticipation of crucial economic data scheduled for release later in the week, specifically the inflation readings from the USA set to be disclosed on Thursday.

Anticipations are for a slight upward adjustment in the Consumer Price Index (CPI) readings, excluding core inflation. The question looms whether this will prompt a strengthening of the dollar exchange rate. However, there are legitimate doubts regarding this outcome.

Another aspect deserving attention is the yields of U.S. bonds. The approach towards the 4% mark has already triggered initial reactions from the supply side. If subsequent trading sessions reveal that the recent increases were merely corrective in nature, the dollar exchange rate is likely to initiate a decline.

Concerning the euro exchange rate, recent statements from both the European Central Bank (ECB) and the Federal Reserve (Fed) have not introduced any new elements into the market dynamics. The EUR/USD pair has essentially remained stagnant for few sessions, seemingly indifferent to a series of economic data releases and official statements. This underscores the heightened significance of tomorrow's inflation data release.

The inflation figures are scheduled for publication at 13:30 (London time). What are our predictions for EUR/USD? Our strategy assumes that some of the readings will exhibit a marginal increase. In our assessment, this is already factored into the market following the corrective movements seen after the New Year, and additionally, market participants may attribute it to heightened holiday-related spending.

EUR/USD, H4 chart, MetaTrader

economic calendar
Economic calendar,

Nevertheless, the prevailing trend in CPI readings remains downward, and even an optimistic outcome from the data release may not be sufficient to alter this trajectory. Therefore, we are inclined to anticipate a scenario in which the dollar exchange rate begins to weaken, even if the data marginally favors it.

From a purely technical perspective, the overall picture aligns. There is a discernible upward trend coupled with a standard-sized correction that has been consolidating for several days. Indicators have undergone a cooling-off period. If the initial attempt does not yield the desired outcome, subsequent market moves are likely to exhibit positive divergence.


bottom of page