Euro comes under pressure and recedes to 1.0940, focus on US data, Fedspeak

• The Euro gives aways part of its recent advance against the US Dollar.
• European stocks open Tuesday’s session with generalized losses.
• Markets’ attention will be on US Consumer Confidence and Fedspeak.

The Euro has so far abandoned its march north against the US Dollar, motivating EUR/USD to leave behind the area of recent peaks around 1.0960 on Tuesday.

On the flip side, the Greenback appears to be tepidly bid in the low 103.00s when tracked by the USD Index (DXY), managing to regain some balance following early lows near the 103.00 support.

There are no changes to the monetary policy front, as investors continue to factor in the likelihood of interest rate cuts by both the Federal Reserve (Fed) and the European Central Bank (ECB) at some point in the spring of 2024.

On the domestic calendar, Consumer Confidence in Germany, measured by GfK, improved marginally to -27.8 in December, while Consumer Confidence in France edged higher to 87 in November.

In the US docket, the Conference Board’s Consumer Confidence will take centre stage, followed by the FHFA’s House Price Index.

Additionally, Chicago Fed Austan Goolsbee (voter, centrist), FOMC Christopher Waller (permanent voter, hawk), FOMC Michelle Bowman (permanent voter, centrist), and FOMC Michael Barr (permanent voter, centrist) are all due to speak.

Daily digest market movers: Euro meets a solid resistance around 1.0960

• The EUR reverses part of the recent gains against the USD.
• US and German yields edge a tad higher early on Tuesday.
• Markets see the Fed starting its interest rate cuts in Q2 2024.
• Investors’ consensus place the ECB extending its pause until H2 2024.
• ECB’s Joaquim Nagel does not rule out rate hikes if inflation picks up pace.
• RBA’s Michele Bullock kept the cautious tone earlier in the Asian session.

Technical Analysis: Euro continues to target 1.1000  

EUR/USD’s upside momentum appears so far limited by the area of monthly highs in the 1.0960-1.0965 band.

The November high of 1.0965 (November 21) is now the immediate goal for bulls ahead of the critical 1.1000 level. Further north, EUR/USD might face resistance around the August top of 1.1064 (August 10) and another weekly peak of 1.1149 (July 27), both of which precede the 2023 high of 1.1275 (July 18).

In the meanwhile, any corrective dips should find support initially at the key 200-day SMA at 1.0812, followed by the temporary 55-day SMA at 1.0665. South from here comes the weekly low of 1.0495 (October 13) prior to the 2023 low of 1.0448 (October 3).

Overall, the pair's chances should remain strong as long as it stays above the 200-day SMA.