The EUR/USD hit a 10-day low near 1.0800 today within the current correction after ending yesterday’s Monday in negative territory. Thus, short-term technical indicators suggest that the bears remain in control of the price trend for the time being. Thus, the share price has now moved further down by -0.2% so far.
As the market was expecting important macroeconomic data at the start of trading today, the major stock indices in the U.S. corrected downward. In addition, the benchmark yield on 10-year U.S. government bonds rose further above 3.5%, giving the U.S. dollar an additional boost. Data from Germany this morning showed a 5.3% drop in December retail sales on a monthly basis. This figure was thus significantly weaker than the expected increase of 0.2% and made it more difficult for the euro to recover.
Later in the day, the euro area’s gross domestic product (GDP) for the fourth quarter was published. Investors expected GDP to fall from 2.3% in the third quarter to 1.8%, while it actually declined to 1.9%.
At the moment, investors are mainly waiting for the Federal Reserve’s monetary policy announcements on Wednesday, where, among other things, the new key interest rate for the U.S. dollar will be announced. The interest rate is expected to increase from 4.5% to 4.75%. It should be noted that the volatility of the currency pair and also of the indices will increase around the time of the data release.
