There is a likelihood that the $EURUSD pair will have a bearish breakout, with the next support at 1.1250. Trade with our Forex signal:
Enter your emailThere is a likelihood that the pair will have a bearish breakout, with the next support at 1.1250.Timeline: 1-3 days.pair is in a consolidation mode as investors assess the overall divergence between the Federal Reserve and the European Central Bank .AdvertisementA key theme in the market recently is about the divergence between the ECB and the Fed. The Fed has already made it clear that it will start hikingthis year.
On the other hand, the ECB has hinted that it will maintain its policy for a while. In a statement last week, Christine Lagarde said that the bank was still data-dependent and was not committing to do anything. That statement came shortly after data from the country showed that the headline consumer price index jumped to a record high of 5.0% in December.
The main catalyst for the EUR/USD pair today will be the latest flash manufacturing and services PMI data from the EU and the US. Analysts expect that the two sectors held steady in January even as the omicron variant caused havoc in the two sides. For the Eurozone, analysts expect the data to show that the manufacturing PMI rose to 57.5 in January while the services PMI rose to 52.2. On the other hand, for the United States, analysts expect the data to show that the manufacturing and services PMI rose to 56.7 and 55.0, respectively. Still, these numbers will likely not lead to substantial volatility on the pair.The four-hour chart shows that the EUR/USD pair declined sharply last week as a risk-off sentiment remained.
The pair is trading at 1.1345, which is 1.25% below the highest level this month. It crossed the key level at 1.1350, where it had struggled moving above in December.
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