$EURUSD Forex signal -
It dropped to a low of 1.0523, which was the lowest point since December 12. It has plunged by more than 1.55% from its highest point in December.The EUR/USD price dropped as the US dollar index surged on Tuesday. The index, which tracks the performance of the greenback against a basket of currencies, rose by more than 1.13% on Tuesday. This rally coincided with the strong performance of the VIX index, which rose by over 8.7% to $23.5.
Further, the dollar rebound happened as American stocks tumbled while bond yields declined. The Dow Jones, Nasdaq 100, and S&P 500 indices fell by over 1.5% after Tesla announced weak deliveries for December and 2022 in general.Meanwhile, bond yields pulled back, with those tied to the 10-year and 30-year falling to 3.78% and 3.87%, respectively. This performance is mostly a signal that investors are still worried about a recession in 2023 as companies slash spending.
The EUR/USD declined even after some encouraging data from Germany. Data by the statistics agency showed that the country’s inflation dropped to 9.6% in December from 11.3% in the previous month. This decline was also lower than the seven-decade peak of 11.6% that it hit in October. This decline happened as natural gas prices dropped.
The next key mover for the EUR/USD price will be the upcoming FOMC minutes. These minutes will provide more color about what to expect in the coming months.This consolidation ended on Tuesday when the pair made a strong bearish breakout. As it dropped, it moved below the ascending trendline shown in black. It also dropped below the 25-day and 50-dayflag pattern. Therefore, it will likely continue falling as sellers target the key support at 1.0450. A move above the resistance point at 1.
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