Selling in the euro currency has increased following hints from the European Central Bank that suggest interest rate cuts may not be guaranteed by 2024.

Similarly, political tensions such as those occurring in the Middle East threaten energy markets and will likely be an extra pressure for the European Central Bank to bear, more so in the winter season when energy consumption tends to increase. We must not forget the tensions in the Red Sea, which could also affect oil prices and, at the same time, affect the world’s leading economies, since as a commodity such as crude oil becomes more expensive, all inputs, especially gasoline, will suffer a substantial increase in their prices.

Another issue that cannot be left aside is inflation, close to the European Central Bank’s target of 2%. As mentioned before, if the inflation numbers are higher than expected in the UK, this could positively impact both the pound and the euro, which could be an option to take buy or sell positions depending on the style of each investor.

Technical analysis of the EUR/USD for today, January 17:

Looking at the chart, we can see how the price is in a downtrend and has broken the support established at 1.0880, which can move both the euro and the dollar to new levels for buying operations at levels between 1.0845 and 1.0760, in that order.

This level is likely to indicate overbought conditions in technical indicators, suggesting a higher possibility of selling. On the other hand, if the pair returns to the psychological resistance of 1.100, traders may take control and see possibilities for market entries. We must wait for the Federal Reserve’s inflation announcement this economic week to see how the EUR/USD will react.