Chart of the day: EURUSD (16.01.2024)

The U.S. dollar continues to strengthen against other currencies of developed countries. The departure of US 10-year yields above the 4% barrier put pressure on today's session in APAC markets and the current session in Europe. Technically, today's sell-off has already reached over 0.55% and lifted the EURSD pair below the key 1.0900 zone. The latest data on ECB consumer predictions for CPI inflation showed a sharp drop in 12-month forecasts to 3.2% (previously it was 4.0%).

Since the beginning of the year, money market valuations have undergone slight changes. The probability of the first interest rate cuts in March has fallen and is now estimated at 65%. Data for the Fed. Source: Bloomberg Financial LP

From a technical perspective, the key question now seems to be whether the pair will manage to defend the support zone set by the previously mentioned 1.0900 barrier, further reinforced by the 50-day exponential moving average (blue curve) and the retracement of the 23.6% Fibo of the upward wave initiated in September 2022. The 1.1000 zone could be a key resistance barrier in case of upward breakouts.

Source: xStation