Investing.com – The last day of the year was positive for the last Friday as the currency pair breached the 1.07 level shortly before the annual Forex close, but this first day of 2023 looks uncertain so that the Euro hesitates around this key threshold.
It should be recalled that the solid rise in EUR/USD over the last two months of 2022 was largely explained by expectations of a dovish pivot from the Fed, which would allow the ECB to “catch up on the Fed” in terms of raising rates, and thus reducing the spread with the Fed, in favor of the Euro.
As for Monday, the calendar will remain empty in the United States due to a public holiday, while in Europe EUR/USD traders will be watching for new estimates of manufacturing PMIs from the countries of the eurozone.
From a graphical point of view, it will be recalled that the Euro Dollar sent a strong signal last week, when the 50-day moving average crossed above the 200-day moving average, a widely recognized powerful bullish signal.
To confirm the prospect of further gains and a sustained uptrend, EUR/USD will need to break through the resistance zone formed by the psychological level at 1.07 and the December 15 high at 1.0737. Finally, on the downside, the psychological threshold of 1.06 is the first support to take into account in the short term for the Euro Dollar.