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Investing.com – The pair is enjoying a fairly quiet holiday season so far, with the Euro consolidating in a narrow range once morest the Dollar for several days, while news from the final days of 2022 offers little of catalysts.
Recall that the gains of the EUR/USD over the last two months of the year are linked to the anticipation of a pivot by the Fed towards a rate cut at the end of 2023 or the beginning of 2024, following the rapid and sharp rise in 2022 rate, which will continue into early 2023 according to current Fed guidance.
However, for its part, the ECB has been slower to raise rates, and this discrepancy with the Fed implies the outlook for rate divergence which is diminishing in favor of the Euro.
However, the wait-and-see attitude dominates over these last days of the year, with a fairly light economic calendar. Moreover, with regard to the statistics expected today, only the promises of US housing sales will be likely to influence the EUR/USD price.
Major bullish technical signal imminent for EUR/USD
On the other hand, from a graphic point of view, this period of the end of the year 2023 is much more interesting. Indeed, as seen on the daily chart below, a crossover of the 50-day moving average above the 200-day moving average is imminent.
However, crosses of the 50-day MA above the 200-day MA are major bullish technical signals known as “golden crosses”. The last time this signal was recorded, at the end of June 2020, EUR/USD then recorded within 6 months a gain of around 1150 pips.
The reverse of this signal, i.e. a crossing of the 50-MA under the 200-day MA, a signal known as a “death cross”, was recorded at the end of July 2021. EUR/USD then dropped over 2000 pips in 14 months.
Finally, regarding the important thresholds to watch in the short term, the Euro-Dollar benefits from an immediate support zone at 1.0570-1.06, while the zone of 1.07 and the December 15 high at 1.0737 form the first resistance area that EUR/USD traders should be aware of.
