Market news

17 December 2021

EUR/USD remains confined in a range, below mid-1.1300s post-German IFO

  • EUR/USD oscillated in a narrow trading band through the early part of the European session.
  • The economic risks stemming from the Omicron variant acted as a headwind for the euro.
  • The disappointing German IFO Business Climate Index did little to impress bullish traders.

The EUR/USD pair seesawed between tepid gains/minor losses and remained confined in a narrow trading band, below mid-1.1300s through the first half of the European session.

The European Central Bank (ECB) adopted a more hawkish stance on Thursday and announced that it will discontinue net asset purchases under the PEPP in March 2022. The ECB, however, warned about the uncertainty about the economic risk stemming from the rapid spread of the Omicron variant of the coronavirus and emphasized policy flexibility.

Apart from this, the disappointing release of the German IFO Business Climate Index, which fell to 94.7 in December from 96.6 previous, held back traders from placing bullish bets around the shared currency. That said, the post-FOMC US dollar selling bias continued lending some support to the EUR/USD pair and helped limit any meaningful slide.

The Fed on Wednesday announced that it would double the pace of tapering to $30 billion per month. Moreover, the so-called dot plot indicated that officials expect to raise the fed funds rate at least three times next year. The markets, however, had already priced in the prospects for a faster policy tightening, which, in turn, continued weighing on the USD.

Meanwhile, the EUR/USD pair's inability to gain any meaningful traction or capitalize on this week's goodish rebound from the 1.1220 area warrants some caution for aggressive bullish traders. This makes it prudent to wait for a strong follow-through buying before positioning for an extension of the recent bounce from the YTD low touched in November.

Technical levels to watch

 

Market Focus

Material posted here is solely for information purposes and reliance on this may lead to losses. Past performances are not a reliable indicator of future results. Please read our full disclaimer.

Open Demo Account
I understand and accept the Privacy Policy and agree that my name and contact details can be used by TeleTrade to contact me about the information I have selected.
23 International Awards
Have a question?

We are ready to assist you in every step of your trading experience
by providing 24/5 multilingual customer support.

Follow us

Risk Warning: Trading Forex and CFDs on margin carries a high level of risk and may not be suitable for all investors. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.72% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Prior to trading, you should take into consideration your level of experience and financial situation. TeleTrade strives to provide you with all the necessary information and protective measures, but, if the risks seem still unclear to you, please seek independent advice.

© 2011-2022 Teletrade-DJ International Consulting Ltd

Teletrade-DJ International Consulting Ltd is registered as a Cyprus Investment Firm (CIF) under registration number HE272810 and is licensed by the Cyprus Securities and Exchange Commission (CySEC) under license number 158/11.

The company operates in accordance with the Markets in Financial Instruments Directive (MiFID).

The content on this website is for information purposes only. All the services and information provided have been obtained from sources deemed to be reliable. Teletrade-DJ International Consulting Ltd ("TeleTrade") and/or any third-party information providers provide the services and information without warranty of any kind. By using this information and services you agree that under no circumstances shall TeleTrade have any liability to any person or entity for any loss or damage in whole or part caused by reliance on such information and services.

TeleTrade cooperates exclusively with regulated financial institutions for the safekeeping of clients' funds. Please see the entire list of banks and payment service providers entrusted with the handling of clients' funds.

Please read our full Terms of Use.

To maximise our visitors' browsing experience, TeleTrade uses cookies in our web services. By continuing to browse this site you agree to our use of cookies.

Teletrade-DJ International Consulting Ltd currently provides its services on a cross-border basis, within EEA states (except Belgium) under the MiFID passporting regime, and in selected 3rd countries. TeleTrade does not provide its services to residents or nationals of the USA.

Material posted here is solely for information purposes and reliance on this may lead to losses. Past performances are not a reliable indicator of future results. Please read our full disclaimer.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.72% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Choose your language/location