The Euro had its biggest fall in 2 weeks against the US dollar in yesterday’s trading session after a strong round of data from the US and fears that the worst of the coronavirus may be far from over.
The Initial Jobless Claims in the US hit the market yesterday at 184,000 during the week ending Dec 4, which marks the lowest level since 1969 and was well below analysts’ predictions who were expecting a number of Analysts in a survey compiled by Bloomberg had expected claims 220,000.
Adding to the Euro’s woes are persisting. COVID-19 infection rates that continue to rise, and the possibility for more stringent lockdowns has increased as government officials scramble to figure out the best way to deal with the omicron variant.
the coronavirus variant called Omicron is said to be 4.2 times more transmissible than the Delta version, according to research and the European Centre for Disease Prevention and Control has predicted that the Omicron variant could become the dominant variant in Europe within months.
The market will be keeping an eye on any further negative developments with regards to the omicron variant spreading throughout Europe but the highlight of the day, and the major driver of the EUR/USD currency pair will be the release of the Consumer Price Index from the US.
Analysts are expecting a figure of 6.9% in November, up from a 6.2% in October and if they are correct, it will mark a new 30 year high for inflation figures in the world’s largest economy and will probably see the Euro finish the week on a sour note against the greenback.
On the chart we can see the bottom line of the downward trend channel and the resistance mark of $1.1342 proved to be a significant barrier for the Euro in yesterday’s trading session and the EUR/USD currency pair was solidly rejected at this mark.
As we enter today’s trading session the Euro is trading slightly higher as the market awaits CPI figures in the US. and we expect a bit of movement as we enter the US session and traders begin to take positions in the EUR/USD currency pair before the news hits the market.