• Data revealed US job openings fell to an over 2 ½ year low.

• There was a slight easing in the downturn of Eurozone business activity last month.

• Schnabel suggested the ECB could rule out further interest rate hikes.

Wednesday’s EUR/USD forecast painted a bearish picture as the dollar stood tall near a two-week high against its peers. Meanwhile, investors digested US economic data indicating a cooling labor market, speculating that the Fed might implement rate cuts next year. Tuesday’s data revealed US job openings fell to an over 2 ½ year low.

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Elsewhere, there was a slight easing in the downturn of Eurozone business activity last month. However, a survey suggested that the bloc’s economy is poised to contract again this quarter. Moreover, the dominant services industry struggles to generate demand, and the last quarter saw a 0.1% contraction in the economy.

The November Composite Purchasing Managers’ Index (PMI), released on Tuesday, pointed to a recurring contraction in the Eurozone this quarter. Consequently, it meets the technical definition of a recession.

Meanwhile, European Central Bank (ECB) board member Isabel Schnabel indicated a dovish shift in response to a big fall in inflation. Furthermore, Schnabel advised against rates remaining steady through mid-2024 and suggested the ECB could rule out further interest rate hikes. As a result, expectations of a rate cut rose on Tuesday.

Eurozone inflation dropped to 2.4% last month, down from over 10% a year earlier, following ten consecutive rate hikes. Consequently, it brought the ECB’s 2% inflation target into view and raised doubts about policymakers’ warnings of another two years of persistent price growth.

EUR/USD key events today

• The US Private Employment Change report

EUR/USD technical forecast: Bears zero in on 1.0751 as the next support

The euro has fallen below the 1.0851 key level to make a new low, strengthening the bearish bias. The price trades well below the 30-SMA, and the RSI is oversold. Bears took over when the price made a strong candle that broke below the 30-SMA and the 1.0950 key level. Since then, the price has descended with shallow pullbacks. Bears are now targeting the next support at 1.0751.

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However, bulls might soon resurface for a stronger pullback to retest the 30-SMA resistance since the price is currently oversold. It would be the first test since bears took control. Therefore, strong resistance at the SMA would mean bears have a firm hold on the current move and might continue below the 1.0751 support level.

https://www.forexcrunch.com/blog/2023/12/06/eur-usd-forecast-dollar-hovers-close-to-a-two-week-peak/