The EUR/USD pair trades a handful of pips below the 1.0800 mark, giving up to broad US Dollar demand as risk aversion dominates financial markets. Hawkish ECB officials, including President Christine Lagarde, limit EUR downside.

More relevantly, she said that they are not seeing inflation expectations unanchoring, clearly hinting at multiple rate hikes ahead. EUR/USD hit 1.0837 with her words, although it is currently retreating amid broad safety demand.

The macroeconomic calendar has nothing relevant to offer on Thursday. The Euro Zone published the November Current Account, which posted a seasonally adjusted surplus of €13.6 billion, much better than the previous deficit of €0.58 billion. Later in the day, the US will publish December Housing Starts and Building Permits, Initial Jobless Claims for the week ended January 13, and the January Philadelphia Fed Manufacturing Survey.

The EUR/USD pair recovered within range and trades around the 1.0810 level. The daily chart shows that bulls retain control, although buyers remain sidelined. Technical indicators stand flat within positive levels, reflecting the on-hold stance. At the same time, the pair is developing above all of its moving averages, with the 20 SMA heading firmly north above the longer ones and providing dynamic support at around 1.0690.

The near-term picture is neutral. In the 4-hour chart, EUR/USD seesaws around a mildly bearish 20 SMA, while the longer moving averages head firmly north far below the current levels. However, technical indicators are stuck to their midlines, turning modestly lower but without directional strength. As long as the pair remains above 1.0745, the 61.8% Fibonacci retracement of the 2022 slump, the chances of a steeper decline will remain limited.

EURUSD to enter a phase of correction on daily cycle

Jan 19 2023