Trying to Sell EUR/USD As It Retraces Up on Better EU Economic Forecasts

Posted Monday, February 13, 2023 by
Skerdian Meta • 2 min read

The USD has been making a strong bullish reversal for more than a week, since the release of the impressive US services and employment reports for January. The Buck was retreating for several months since October as the FED slowed down with rate hikes, but the recent data from the US has been decent and bow traders are pricing in a higher terminal top for FED rates.

EUR/USD H4 Chart – MAs Have Turned Into Resistance

We’re looking to sell this pair at the 200 SMA

As a result, the USD has been making strong gains but today it is retreating, so EUR/USD has been pushing higher. A newswire headline says that top US and China diplomats are weighing their first meeting since the balloon incident. Given that ‘indicted’ was just a week ago, this isn’t exactly a groundbreaking achievement. It also came at the same time U.S. Secretary of State Antony Blinken had a trip planned.

So, the risk sentiment is looking positive, which is also a sign that the US CPI (consumer price index) might not continue the decline in January, when the numbers get released on Wednesday. So, we are looking to open a sell EUR/USD signal, either here at the 20 SMA (gray) or at the 100 SMA (green).

Today’s Economic Forecasts by the European Commission

Euro area growth in 2023 likely to be 0.9% (up from 0.3% previously in November)
To avoid the supposed earlier technical recession
Sees Q4 2022 GDP at 0.1% QoQ, Q1 2023 GDP at 0.0%
Euro area inflation in 2023 seen at 5.6% (down from 6.1% previously)
Euro area inflation in 2024 seen at 2.5% (down from 2.6% previously)

On the forecasts, the European Commission did point out that uncertainty remains high but risks to growth are seen as being more “broadly balanced” – something which the ECB also used in its language earlier this month.