Baxia Markets
December 14, 2023

EURUSD's Remarkable Turnaround: PPI Disappointing and FED's Unyielding Stance Ignite Bullish Momentum

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In the intricate dance of forex markets, EURUSD has undergone a remarkable shift from bearish to bullish sentiments, propelled by unexpected turns in the US PPI (MoM) and the Federal Reserve's steadfast decision on interest rates.

Yesterday's revelation of the US PPI (MoM) for November brought an element of surprise as the actual figure of 0.0% fell short of economists' forecasts, set at 0.1%. This unforeseen deviation initiated a series of events that significantly impacted the EURUSD pair.


The aftermath of the FED interest rate announcement, with no alteration in the interest rate at 5.5%, witnessed a substantial surge in EURUSD. A prominent bullish Marubozu candlestick emerged just hours before the market closure on Wednesday, marking a pivotal moment in the trend reversal from bearish to bullish.

EURUSD's Remarkable Turnaround: PPI Surprises and FED's Unyielding Stance Ignite Bullish Momentum

The Marubozu candlestick not only broke above the EMA 50 and EMA 200 but also conquered the key resistance level at 1.08474. This powerful candlestick pattern spurred a remarkable 1% appreciation in the EURUSD price, indicating a noteworthy shift in market dynamics.


The subsequent golden cross between EMA 50 and EMA 200 further validated the bullish momentum. Both EMA lines are now expanding, signifying the continued dominance of the bullish sentiment in the market.


As the price currently resides beyond the upper side of the value area, as denoted by the pink-colored lines on the volume profile, a robust bullish trend is evident. This positioning emphasizes the strength of the bullish momentum that has gripped EURUSD.


Analyzing the MACD oscillator indicator reveals both the histogram and signal line comfortably above the 0 line, underscoring the prevailing bullish sentiment. Additionally, the RSI's breach above the 60% level aligns with the overall bullish outlook.


As the market eagerly awaits today's economic news releases, including Initial Jobless Claims and Retail Sales data, economists project a mixed outcome. If these releases materialize as anticipated, or better, the EURUSD bulls may find further strength.


In summary, the bearish trend in EURUSD has undergone a substantial reversal, triggered by Wednesday's unexpected PPI results and the FED's unchanged interest rates. The emergence of the bullish Marubozu candlestick pattern, coupled with a 1% surge, signifies a new chapter for EURUSD. With today's economic releases potentially adding more fuel to the bullish fire, traders are poised for an intriguing journey in the currency markets.

Key Economic Releases to Watch Today

USD, Core Retail Sales (MoM) (Nov) 

Forecast -0.1% vs Previous 0.1%

USD, Initial Jobless Claims

Forecast 220k vs Previous 220k

USD, Retail Sales (MoM) (Nov)

Forecast -0.1% vs Previous -0.1%

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