Based on the latest currency market data, this forex analysis aims to supply daily insight into the trading performance of the EUR/USD currency pair as of January 3, 2024. It covers daily, weekly, and monthly movement changes, the weekly correlation with the FGC Dollar Indicator (our Proprietary US Dollar Forex Indicator), the trading condition, and predictive trading ranges.
Analyzing Forex Market Sentiment
- Percentage Changes:
- Day-Over-Day Change: A decrease of 0.19% from the previous day.
- Week-Over-Week Change: A decline of 1.10% over the past week.
- Month-Over-Month Change: A slight increase of 0.31% over the past month.
- Correlation and Trading Condition:
- Weekly Correlation vs. FGC Dollar Indicator: A strong negative correlation at -0.9667.
- Trading Condition: The pair remains ‘Oversold’, potentially poised for a market correction, or rebound.
- Key Support/Resistance Levels:
- Lower Extreme: 1.0870
- Lower Level: 1.0937
- Mid-Level: 1.1003
- Upper Level: 1.1069
- Upper Extreme: 1.1136
- Predictive Trading Range Probabilities:
- Upper Range (22.92% Chance): More Than or Equal to 1.1052
- Mid-Range (40.25% Chance): More Than or Equal to 1.1019
- Lower Range (70.74% Chance): More Than or Equal to 1.0967
Forex Trading Strategies for Volatile Markets
- Continued Daily Decline: The additional day-over-day decrease aligns with the negative week-over-week trend, indicating ongoing bearish market sentiment.
- Mixed Longer-Term Trend: Despite the recent declines, the month-over-month increase suggests some underlying strength in the longer term.
- Persisting Oversold Condition: The ‘Oversold’ signals that the EUR/USD as potentially overextended to the downside in the short-term, which could set-up for a potential upward movement as the market awaits economic data this week.
- Trading Strategy Considerations:
- The support and resistance levels highlight 1.1003 (Mid-Level) as a significant point that could influence short-term trading decisions.
- The predictive trading range suggests a higher probability (70.74%) of the pair moving above 1.0967, pointing to strong support near this level.
- The relatively lower likelihood (22.92%) of exceeding 1.1052 indicates resistance near the upper range.
Currency Market News and Upcoming Economic Data
Release Date (1.4.2024):
- ADP Nonfarm Employment Change (Dec)
- Continuing Jobless Claims
- Initial Jobless Claims
- S&P Global Composite PMI (Dec)
- Services PMI (Dec)
- Crude Oil Inventories
- Fed’s Balance Sheet
- Challenger Job Cuts y/y
Conclusion: The EUR/USD pair shows a short-term downward trend but maintains some resilience in the month-over-month perspective. The ‘Oversold’ condition and the strong negative correlation with the FGC Dollar Indicator remain crucial for traders to consider, as they imply the potential for an upward correction. The predictive trading range probabilities indicate key levels for support and resistance, which traders should closely monitor for strategic trading decisions in this dynamic market environment.
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