Euro found a pivot point at 1.1260
On Monday, December 13, at the end of the day, the euro fell against the dollar by 0.29%, to 1.1284. The single currency showed multidirectional movement. In the Asian session, the price dropped to 1.1260, from which it recovered to 1.1307 in the afternoon. The euro / pound cross helped the price rise after the news from the UK was released.
Britain has reported the first death associated with the Omicron variant. Health Minister Sajid Javid told MPs that Omicron currently accounts for 20% of cases in England. Boris Johnson does not rule out tightening Covid-19 restrictions.
The fall in US stock indexes has intensified bearish sentiment in all markets. Bank of America recommends investors to sell shares as the Fed will raise rates on Wednesday and it will be too late. The euro / dollar pair held at 1.1285 due to the crosses.
Scheduled statistics (GMT +2):
At 12:00 in the euro area will release a report on changes in industrial production for October
At 15:30 the US is to publish the November PPI.
At 16:30 in the UK will be released the index of leading indicators from the Conference Board for October.
At 21:00, RBNZ Governor Adrian Orr will deliver a speech.
Current situation:
At the time of this writing, the euro is worth 1.1282. Major currencies are trading slightly downside. Investors are ditching risk ahead of central bank meetings, coupled with the spread of the Omicron virus. They fear that the EU will become the epicenter of a new variant of covid.
The dollar is holding its positions ahead of the US Federal Reserve meeting, at which the volume of the reduction in bond purchases is expected to double. On Thursday, the ECB will announce the decision. Inflation in the euro area is high. Consumer prices are currently at a record 4.9%, well above the 2% target. The ECB considers inflation to be temporary and does not want to cut the bond buyback program and raise rates. Inflation is becoming stable and may change the plans of the regulator.
Technical analysis:
In the foreign exchange market, major currencies remain traded within limited ranges. Currencies (AUD, NZD, CAD), which fell the most, are recovering. The economic calendar remains blank. The attention of speculators is riveted on the headlines on the new strain of covid-19 and the dynamics of stock indices.
A narrowing formation is forming at the hourly timeframe for the EUR / USD pair. The price found a foothold at 1.1260 and is now trying to find an equilibrium, where it is possible to wait for the announcement of the decision of the US Federal Reserve System. Uncertainty remains on the market due to Omicron and the sell-off of European and American stocks.
Summary:
Monday, the euro closed slightly in the red. Negative news from the UK about Omicron hit the stock indices hard. The Euro and the British survived them. At the latest quotes, the EUR / USD pair is trading at 1.1281. Market participants are awaiting the announcement of the decisions of the US Federal Reserve and the ECB, as well as speeches by Powell and Lagarde.