EUR/USD Faces Correction to 1.090 Amid Dollar Weakness

EUR/USD Faces Correction to 1.090 Amid Dollar Weakness

EUR/USD is currently maintaining its position around 1.0950, benefitting from a weakened US Dollar in European trading on Monday. The pair's upward momentum is sustained by subdued US Treasury bond yields and an overall cautious market sentiment. However, a closer look at the H1 timeframe suggests a potential correction towards the 1.090 area, marked by resistance, RSI divergence, and clear rejection at a key price level. The analysis points to a bearish impulse this week, with a probable retreat to the 50% Fibonacci retracement level from the previous swing.

This week's focal point will be Thursday's release of the flash CPI for November. Forecasts anticipate a further dip in both headline and core readings, reverting year-on-year rates to 2.7% and 3.9%, respectively. Such figures could reinforce expectations of a 70 basis points easing by the European Central Bank (ECB) in the Eurozone next year, adding an interesting dynamic to the currency market.

Our preference

Below 1.09875 look for further downside with 1.09085 & 1.08900 as targets.

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