The EUR/USD Concludes a Losing Week After Erasing Daily Losses and Defending the 20-Day SMA

The EUR/USD recouped a significant portion of its daily losses on Friday, recovering to 1.0885 after finding support near a low of 1.0830. The recovery was catalysed by a widespread deterioration in the US dollar, which, notwithstanding the optimistic remarks made by Powell during his address at Spelman College, encounters difficulties in advancing. A week later, the shared currency will close with a loss of 0.60 percent, following a gain of over 2 percent since mid-November.

Consistent with this, Chairman Powell acknowledged that core inflation remains elevated despite a decline in inflation. Further evidence regarding progress towards the 2% inflation target was emphasised by him. Additionally, he noted that interest rates are behaving in a restrictive manner, but advised against unduly concluding that monetary policy has adopted an excessively restrictive position. He subsequently asserted that such decisions would continue to be predicated on the incoming data.

In terms of data, the November Manufacturing PMI from the Institute for Supply Management (ISM) registered 46.7, which was consistent with the previous reading but below expectations of 47.6. Investors will intently monitor the monthly Nonfarm Payrolls report that the United States releases the following week.